Audits are a necessary part of any technology operation, whether it’s a direct audit of technology department processes or an audit of systems supporting financial reporting. However, audits can be costly, time-consuming, and disruptive to operations. A primary factor influencing the cost is the billable hours spent by the auditor.

If you’ve ever felt that your auditor is requesting excessive information, leading to increased billable hours, remember that some responsibility lies with you and your team to reduce that bill for your company.

The key to a smoother, faster, and more cost-effective audit is proactivity. By anticipating your auditor’s needs and having the required information readily available, you can contain billable hours and the disruptions to your operations, allowing you to get back to your core responsibilities faster.

Understanding the Audit Process and Requirements

To properly prepare your technology team for an audit, it is vital to have a comprehensive understanding of the audit process. This includes becoming familiar with the applicable standards and any industry-specific frameworks or regulations that the auditor may use. Without this knowledge, you cannot adequately prepare for the audit.

You don’t need to hire and maintain an auditor on your own team to do this but someone should have some training on audit methodologies who will also act as the main point of contact during the audit.

Implementing Internal Controls

Implementing strong internal controls is crucial for minimizing errors, failures, and outages. This also can significantly reduce the sampling scope and duration during an audit. With mature internal controls and processes, the statistical probability of discovering irregularities decreases, leading to less time and effort required by auditors for investigation, clarification, or addressing potential findings. Periodic self-assurance is therefore essential to making sure that your controls are doing what they are supposed to before you face any audit.

Maintaining Organized Records

Meticulous and current documentation is key to a seamless audit. This includes maintaining detailed records for all technology, critical control operations, and transactions, as well as supporting process documents for areas like identity and access management, change management, incident response, and disaster recovery.

Furthermore, all policies and standards within your technology function should be clearly documented, readily accessible, and ideally updated a few months before any audit as this will be the first information asked for. Auditors are likely to be suspicious of any documents that appear to have been created or revised just in time for the audit.

Structuring your RFI Folder

When fulfilling a Request For Information (RFI) during an audit, create an internal shared folder where team members can collaborate on the evidence for submission and for potentially sharing with the audit team. Establish a numbering or sequencing system for the RFI if one was not provided to prevent omissions, which can occur during large document requests.

A finding for missing documentation is undesirable, especially if you know it was provided but it is buried in a disorganized file dump that you expected the auditor was going to sift through. Proving a document’s existence in such a scenario is time-consuming, and somehow seems to generally happen mainly during audit wrap-up periods which are typically fast and everyone wants to just let it be over.

Identifying and Addressing Potential Issues

Taking a proactive approach to audit preparation means identifying and addressing potential issues before the audit begins. This can include conducting your own internal reviews or risk and control assessments. By taking the initiative and self-declaring any issues to your auditors, you demonstrate transparency and a willingness to address any shortcomings.

This approach streamlines the audit process as those areas should ideally not be re-tested during the audit and allows you to present an action plan, showcasing that you have a process in place to identify, manage and mitigate risk without the need for an audit to be your only source about what needs maturing.

Your auditor should ideally include a section in their report for highlighting management’s self identified issues which they should keep separate from any of the findings they observe themselves.

Collaborating with Your Audit Team

A successful audit relies heavily on open communication and collaboration with your audit team. Be responsive to their requests for information and documentation and provide necessary access to your systems and personnel.

Fostering a cooperative relationship with your auditors facilitates a smoother and more efficient audit. Maintain professionalism but don’t hesitate to stand your ground when justified, but carefully choose which battles to fight or hill to die on.

Leveraging Technology

Leveraging technology can significantly enhance the efficiency and accuracy of audit preparation. By incorporating software, data analytics tools, and automation, you can minimize manual effort, streamline processes, and provide auditors with access to pertinent data.

Automated, system-driven processes can notably reduce the scale and complexity of sampling, as manual processes are inherently more susceptible to errors and, therefore, subject to greater auditor scrutiny.

Consequently, meticulous documentation of any manual file extraction, manipulation, and reporting is essential, as auditors may opt to replicate these procedures to verify results.

Conducting a Pre-Audit

Conducting a pre-audit, or internal review, can be invaluable for finding and fixing potential problems before the external audit starts. This proactive approach should be done at least six months in advance of your planned audit. This lets you get your documentation in order, correct any shortcomings, and highlight to your auditors that your team is well-run and organized.

If you’re finding yourself frequently in meetings with your auditors where you can’t provide information immediately, have to check on it and get back to them later, or where turnaround time is days or weeks, this will reflect poorly on you and your team during the audit.

Choosing the Right Auditor

When choosing an auditor, it’s essential to prioritize those with relevant industry experience and a deep understanding of your specific business. They should offer valuable insights and guidance beyond simply fulfilling their audit responsibilities. A good auditors will go beyond performing “check the box” audits, demonstrating a willingness to learn and understand how your company’s practices are used to manage business risk so they can add value.

Although you can’t choose the specific audit team assigned by your external auditors, you should be able to quickly assess their experience with IT General and Application Controls and, more importantly, their ability to recognize and take into consideration the unique operations, platforms, tools and processes of your technology department.

Key Takeaways

Proactive preparation, including understanding the audit process and regulations, implementing strong internal controls, and maintaining organized documentation, is key to minimizing disruptions and costs during external audits. Collaboration with the audit team, leveraging technology, conducting a pre-audit, and choosing an experienced auditor are also important factors for a successful audit.

Be aware of situations if an audit team appears to be adding scope to create additional billable hours  and questions it. But be equally mindful where your own team and preparedness is a factor in creating a constant back and forth or delays for information and clarification that adds to the time and therefore cost of an audit.