Engagement Tools

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Engagement Tools


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Other engagement tools

Flowcharting - diagrammatic method of

analyzing and understanding the processes andprocedures involved in operations, whether

manual or computerized.

it is applied in the preliminary survey and inobtaining an understanding of internal control

It is also useful in system development

Different systems of symbols have been devised

thus IA activitys usage should be consistent.

Internal auditors also should coordinate their

methods with those of the external auditors


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Horizontal Flowchart Symbols


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VERTICAL FLOWCHART SYMBOLS


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Flowcharts may be employed as a tool for

developing information systemsa. Systems flowchart can document not only

manual processes but also the physical design

specifications for the entire systems, includingall input, output, processing steps, important

files, and documents

b. Program flowcharts depicts the specific stepswithin a program and the order in which they

will be executed.


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SYSTEMS FLOWCHARTS


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developing information systemsc. Data flow diagrams employed in structured

systems analysis, a top-down methodology that

divides a system into levels of modules andspecifies what processes occur in each module

and the connections between the module.

It is a graphic illustrations of a systems processes

and data flows using four basic symbols.


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developing information systemsc. Document flowchart graphically presents the

flow of forms through a system that relate to a

given transactions It shows the source, flow, processing and final

disposition of various copies of all related

documents

d. Control flowchart graphical means of representing

the sequencing of activities and information flows, with

related control points


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Process Mapping Graphs

Auditors should be able to

Use graphical methods for planning and controlling

the audit

Interpret graphic depictions of data when gatheringevidence

Produce graphic analyses for documentation and

reporting purposes


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Program Evaluation and Review Technique (PERT)

Critical Path Method (CPM)

Similar techniques that use network diagrams to

plan and control complex projects such as internalaudits, in which the proper sequencing of activities

is crucial.


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PERT


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CPM


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Gantt chart simpler project control device

It does not depict the interrelationship of

activities and omits calculations of activity times

and costs

It displays the degree of completion of each

activity.


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GANTT CHART


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Gantt chart simpler project control device

It does not depict the interrelationship of

activities and omits calculations of activity times

and costs

It displays the degree of completion of each

activity.


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Scatter diagram

It permits the auditors to identify misstated data,

relationships among variables, and unusual

operating resultsWhen the points have a systematic relationship, the

independent (x) variable and dependent (y) variable

are likely to be correlated thus, the value of one

variable is a predictor of the value of the other.


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SCATTER DIAGRAM


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Cause and effect diagram (Fishbonediagram/Ishikawa diagram)

provides a problem solving techniques that

assists the internal auditors in systematicallysearching for the causes of adverse conditions


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Fishbone diagram/Ishikawa diagram


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Bar charts

two dimensional graphic means of quantitative

comparison

They use bars or rectangles with lengthsproportional to the measure of the data or

things being compared

It may be vertical or horizontal


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Bar charts

a. Pareto diagrams- bar charts in which the

frequencies of the various types of adverse

conditions that may occur in a given processThe tallest (longest) bar signifies the most

common type of problem


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Bar charts

b. Histogram- bar chart used to depict a

frequency distribution

It is used to create a graphic representation of theresults of repeated measurements.


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HISTOGRAM

h l


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Interview is a means of obtaining testimonial

evidence from engagement clients, othermembers of the organization who have contact

with them and independent parties

An interview allows auditor to ask questions clarifying

initial testimony

Auditors may deepen their understanding of operations

and seek reasons for unexpected results and unusual

events and circumstances

Is a secure and personal form of communications

compared with email or paper-based documents.

h l


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Other engagement toolsInterview

One fundamental human relations problem faced by theinternal auditor interviewer is that people dislike beingevaluated Engagement clients may resent even the most constructive

criticism and fear the possibly adverse consequences of anaudit report

The auditor must gain the confidence of clients bydemonstrating self assurance, persuasiveness, fairness,empathy, and competence

The auditor may be able to gain the clients willingcooperation by explaining how the engagement may behelpful to them.

The auditor must avoid the pitfall of over-criticism

o The auditor may resort to excessive criticism of minor matters

O h l


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Interview

Effective planning of an interview involves Preparing by reading operations manual,

organization charts, prior engagement

communications, results of questionnaireo The auditor should also understand the psychological

traits of auditee managers

O h l


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Interview

The interviewer should be tactful, objective,reasonable, and interested

The auditor must avoid accusatory tone and avoid

statements not yet supported by evidenceThe interviewer should not react adversely to the

hostility of the interviewee

The auditor should carefully explain the situation

and provide an opportunity for the interviewee to

calm down and continue the interview.

O h l


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Interview

Active (effective) listening includes Observing interviewee behavior (body language such as

eye contact)

Reserving judgment about what is said

Asking clarifying questionsThe auditor should send appropriate nonverbal signals

and should stop other activities and focus completeattention on the speaker.

Reflecting what is said, that is summarizing orrephrasing an answer is a means of stimulatingadditional comments

The interviewee should be encouraged to ask relevant

questions. These questions should be heard respectfully

Oth t t l


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Interview

Active (effective) listening includes Empathy is a sensitive awareness of the speakers

feelings, thoughts and experience

o

An emphatic listener understands what the speakerwants to communicate rather than what the listeners

wants to understand

Listening with intensity involves concentrating on the

speakers message and disregarding distractions

Attentiveness is promoted by use of active listening

techniques

Anticipation is one approach the interviewer can use to

maintain focus during a far-ranging discussion

Oth t t l


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Interview

Leading questions (questions suggesting theanswers) should be avoided

Loaded questions (questions with self-

incriminating answers) also should be avoided.Questions requiring and explanatory response

are usually preferable to those of the yes/no

variety.Care should be taken to differentiate statements

of fact from statement of opinion

Oth t t l


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Interview

The interview should be recordeda. Good note taking during the interview is essential

Notes should be sufficiently readable and thorough topermit a full reconstruction of the information gathered

This write-up should occur as soon as possible after theinterview

The interviewee should be performed about the need fornote taking

Notes should be properly dated and labeled, and thenames and positions of interviewees should be included

The amount of time spent not looking at the intervieweeshould be minimized, and questions should not be askedwhile jotting notes

Oth t t l


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Interview

The interview should be recorded

b. The notes and the memorandum prepared with

their help are part of the working papers and

therefore the documentation of the engagementused to prepare communications

The memorandum should included significant

events during the interview, such as interruptions oremotional outburst

The internal auditor must be careful to use the

information in its proper context

Oth t t l


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Interview

The interview tend to be of four types:a. Preliminary interview

promote the value of internal auditing

Understand the interviewee

Gather general information

Serve as a basis for planning future interview strategies

b. Fact-gathering interview

oriented to the specific details that can be provided by aparticular interviewee

Elaboration can be sought in a nondirective manner

Oth t t l


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Interview

The interview tend to be of four types:c. Follow-up interview

Intended to answer questions raised during the analysis of the fact-

gathering interview

It also tests the interviewees acceptance of new ideas generated

by the auditor

d. Exit interview

helps to ensure the accuracy of conclusions, findings, and

recommendations in the final engagement communicationby discussing it with the interviewee.

Oth t t l


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Other Data-Gathering Techniques

1. Questionnaires- are an efficient way ofpreparing for an interview

Formal questionnaires may be sent to the

client prior to the auditors visitProvides an opportunity for engagement

client self-evaluation

One use is to obtain an understanding ofclients control



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1. Questionnaires- An internal control questionnaire is often verystructured and detailed and is drafted in a yes/no orshort answer format

Disadvantage of these questionnaires are thato They are difficult to prepare

o They are time-consuming to administer

o Engagement clients may be able to anticipate the preferredresponses and therefore may not be truthful or give sufficient

consideration to the tasko All circumstances cannot be addressed

o They are less effective than interviewing



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2. Checklist increase the uniformity of data acquisition

They ensure that a standard approach is taken andminimize the possibility of omitting consideration offactors that can be anticipated

Disadvantage of checklist include:o Providing a false of security that all relevant factors are

addressed

o Inappropriately implying equal weight to each item on thechecklist

o The difficulty of translating the observation represented byeach item on the checklist



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3. Other data sources Surveys

o Mail questionnaires relatively low in cost, eliminateinterviewer bias, and gather large amount of data

Inflexible Slow response time

Prone to nonresponse bias

o Telephone interviews flexible means of obtaining data rapidly and

controlling the sample Introduce interviewer bias

More costly

Gather less data than mail surveys



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3. Other data sources Rating scales

o Used to allow people to rate things such as service

o

The scale represents a continuum of responses



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Problem solving defined as conscious process of

bringing the actual situation closer to the desiredsituation

Problem-solving process four steps

a. Defining the problem

b. Formulating solutions

c. Choosing a solution

d. Implementing solution



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Problem solving

Techniques in formulating solutionsa. Brainstorming unstructured approach that relies on

spontaneous contribution of ideas from all members

of a group

b. Synectics highly structured group approach to

problem statement and solution based on creative

thinking

free use of analogies and metaphors in informal exchangeswithin selected small group of diverse personality and areas

of specialization



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Problem solving

Techniques in formulating solutionsc. Delphi techniques approach in which the manager

solicits opinions on a problem from experts, summarizes

the opinions, and feeds the summaries back to the

experts.

d. Value analysis methodical approach primarily

designed to optimize performance of an activity at a

minimum coste. Free association approach to idea generation that

reports the first thought to come to mind in response to a

given stimulus



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Problem solving

Techniques in formulating solutionsf. Forced relationship structured adaptation of freeassociation

The elements of a problem are analyzed and theassociations among them are identified so as to detectpatterns that may suggest new ideas

g. Blast then refine US navy problem-solving methodology. Itcompletely disregards any existing approach

An entirely new problem solution is then sought that will attain the

original objectivesh. The Edisonian approach trial and error experimental method

inspired by famous inventor Thomas Edison

It should usually not be applied unless other approaches have beenunsuccessful



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Problem solving

Techniques in formulating solutionsi. Morphological matrix analysis structured technique that

plots decision variables along the axes of a matrix

j. Attribute listing applied primarily to improve

tangible object It lists the parts and essential features of the object and

systematically analyzes modifications intended as improvements

k. Scientific method rigorous method for finding optimal solutions using

classical concepts such as statistics, simulation, logical thinking andother mathematical techniques to develop and test hypotheses

l. Creative leap process that formulates an ideal solution and then

works back to a feasible one.


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QUIZ


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QUIZ (number 1)


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QUIZ (number 1)


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QUIZ (number 2)


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QUIZ (number 2)


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QUIZ (number 3)


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QUIZ (number 3)


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QUIZ (number 4)


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QUIZ (number 4)


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QUIZ (number 5)


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QUIZ (number 5)

Engagement Tools

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