Course description
- The risk-based focus being increasingly adopted is universally accepted as the new benchmark for Internal Audit.
- The flip side of risk however, is opportunity.
- Specifically targeting significant areas of business opportunities in the audit programme can deliver major measurable benefits to the organisation whilst at the same time reducing the associated risks.
- This is particularly true if the areas of the business targeted are those which are often overlooked by management.
- With budgets under even greater scrutiny, demonstrating value for money is more important than ever
- This 2 day course will enable participants to understand the benefits of a opportunity based audit process and how to effectively measure the value added.
Upcoming start dates
Training Course Content
Day 1: The power of Opportunity auditing
What is Opportunity auditing?
- How does it differ from other audit approaches?
- Key questions
- Does your Internal Audit function add measurable added value to your organisation?
- Do you specifically evaluate and report this added value?
- Are you happy with this process?
- Do you measure the value of monetary savings made as a direct result of your audits?
- Have these savings been at least double the cost of your function in each of the past 2 years?
- Are these savings known to and recognised by management?
- Does your audit programme target areas of opportunity as well as risk?
- Do you carry out any specific value for money audits?
- Do VFM assignments account for more than 5% of the annual work programme?
- The benefits of opportunity auditing
- Other outcomes
- Performance Auditing guidance
- The associated dangers e.g. trying to quantify non-quantifiable savings
- Exercise 1 – The benefits of opportunity auditing
The 3 E’s
- The 3 E’s – the cornerstone of opportunity auditing
- Economy and how it can be evaluated
- Minimising the cost of resources whilst maintaining acceptable quality
- Examples of poor economy
- Efficiency and how it should be assessed
- The relationship between inputs and outputs and the use of resources
- Why it is critical to evaluate efficiency – with examples
- Effectiveness and how it can be assessed
- The degree to which the goals or objectives are met
- The measurement of that achievement
- Identification of inputs and outputs
- How to measure the 3 E’s
- Exercise 2 – Assessing the 3 E’s
Opportunity auditing techniques
- Identifying over-managed risks
- These are likely to be the risks in the green zone of the risk matrix
- Opportunity management is a business enabler
- The flip side of risk
- When did you last suggest reducing controls?
- Challenge ‘we have always done it this way’
- Do we have to do it?
- What are the benefits / penalties associated?
- Can we reduce effort in some areas to give time and resource for the priorities?
- Exercise 3- What areas would be useful to review?
Key steps in completing an opportunity review
- The research phase
- Objectives, methodology and techniques
- Establishing terms of reference
- Defining the boundaries of the review
- Gathering of information
- Evaluation of data and effectiveness of management processes
- Evaluation of performance and cost saving potential
- Exercise 4 – Determining the opportunity audit objectives/scope
Choosing the opportunity Audit
- Risk and opportunity approach
- Audits should be prioritized as other audits
- Most common topics
- Travel management
- Mobile communications
- Insurance
- Stationery
- Energy management
- Budgeting
- Meetings management
- Consultancy
- Exercise 5 – Selecting the VFM audit
Day 2: VFM auditing in practice
Performing the Opportunity assignment
- Audit programmes with examples
- Walk through tests
- Audit testing – how to decide the type and depth of testing
- Ask personnel re their frustrations and ideas
- Ask for reports and measures already in use
- Ask about measures they would like to see
- Spending levels and revenues
- Major operations, including in the field
- Control systems
- Functional and audit objectives
- Determining sources of information
- Concerns expressed
- Audit working papers
- Adopt an opportunity matrix
- Prioritising actions to deal with over-managed risks
- Develop an opportunity register
- Exercise 6 – The VFM audit in practice
Performance measures
- How to determine performance measures
- Good KPI’s
- SMART measures
- Auditing performance measures
- Audit programmes in this regard
- Exercise 7 – Assessing Performance measures
Specific VFM assignments – with hints and tips
- Mobile Telecommunications
- What are the objectives?
- What are the risks?
- How to compare bills, tariffs and added value benefits.
- Hardware versus airtime costs – how to evaluate.
- Understanding the trends in the market.
- Identifying the inputs and outputs
- What measures of the 3 E’s would you expect?
- Travel Management
- Building a picture of travel costs – travel recording and management reporting.
- How to gauge the effectiveness of a travel policy.
- Evaluating policy compliance and its financial impact.
- Evaluating the service provided by a travel agent.
- The need to get the best from suppliers.
- How to evaluate savings potential.
- Budgeting
- Evaluating the costs and time involved in preparing a budget
- Steps in agreeing a budget
- Buy in to the budget process and the final budget
- The Forecasting process and the link to budgets
- Ways to improve the process
- How to evaluate savings potential.
- Insurance
- Evaluating current spend.
- Assessment of number of claims.
- Evidence of controls required by the insurer
- Use of captives
- Assessment of self-assurance.
- Could any areas be over insured?
- Procurement
- Marketing
- Audit conclusions
Course delivery details
The course will consist of three 1.5 hour sessions each day.
Delivery method – On-line-live (with exercises to demonstrate audit scenarios and situations that delegates will encounter)
Expenses
Course fee: GBP 350 (US$ 500) which includes comprehensive course materials
Continuing Studies
- Understand the principles and practice of opportunity auditing
- Plan opportunity and value for money assignments effectively
- Develop plans to ensure optimum coverage
- Provide overall assurance on the opportunity assignment
- Establish performance measures
- Write efficient and effective VFM/opportunity audit reports
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