Pulling together a well rounded Internal Audit Annual Plan.
At the start of the year, we released our Guidance document on the Annual Planning process along with accompanying templates. You can visit our Guidance Hub for all the details on the Annual Planning process. Our Guidance document provides and overview of the end to end Annual Planning process, of which the Internal Audit Annual Plan is one of the stages.
The Internal Audit Annual Plan is a central document. It outlines the plan for the current year, where audit activity is going to be performed, and how this contributes to the bigger picture. It will be referred to numerous times throughout the year by the audit committee, executive, and audit team alike. Given this, its important that the document not online is easy to understand, but also provide sufficient detail for a multitude of audiences.
In this post, we will step through some of the key elements which should be included in your Internal Audit Annual Plan to ensure it meets the needs of various users, but reflects the high quality work of the internal audit team.
Firstly, how did we get here?
As mentioned earlier, we have been walking through the annual planning process. You can see the end to end process in our Guidance Hub. We are currently at point 7 on the Annual Planning process diagram. To get to this point, we have considered our Internal Audit Charter and Internal Audit Strategy, reviewed our Audit Universe, understood and challenged the organisational strategy and any other external information, and have held multiple discussions with various stakeholders. Now that we have done each of these various steps, we have a finalised Annual Plan which has been collectively agreed with the senior management of the business. Finally, the plan will be presented to the Audit Committee for their ultimate approval before becoming the go to document for the rest of the internal audit team.
So what information needs to go into our Internal Audit Plan?
Similar to the Internal Audit Strategic Plan, the opportunities are endless for what you may or may not want to include in the Internal Audit Plan. Above all, there are a number of key rules to remember:
Keep it simple - don't bury the reader in too much detail
Tell the story - explain what the document is, what we did to get here, and the benefit to the organisation
Be engaging - make sure the plan captures the readers attention and tells them something new, not what they already know. Audit is to add value as well as provide assurance.
Specific items which should be included in the Annual Plan include:
Audit Purpose (details from the Audit Charter and Audit Strategy);
Overview of the planing process;
Details of the Audit Universe;
Overview of current resourcing;
Overview of the audit plan (with more details included in the appendix); and
Overview of audit activity across the organisation, such as type of audits performed across each business area and historical audit activity across the business.
Each of our templates have been developed to be consistent, meaning you can take your favourite parts from the Internal Audit Strategic Plan or other annual planning documents and simply paste them into the Annual Plan.
When presenting the annual plan, be creative! Pages of text can often all blur into one and lose the readers attention. A few suggestions to add some flare to your audit plan include:
Use of graphs to tell the story;
Colours! Don't make your plan a rainbow, but the use of colours can help brighten up pages and call out key areas;
Use infographs. For instance, if you have a business which operates internationally (or even across multiple locations in a country), dot where audit activity is going to be performed on a map. Alternatively, if its all based in one building, use an image of an office tower and highlight it to show audit activity across each area of the business (i.e 20% of the building shaded blue for HR, 40% of the building shaded green for IT, etc).
Provide background detail. Spelling out why we're doing the audits can help ease any concerns or resistance with management about why audit needs to come into their area; and
Include team photos. Use this as an opportunity to promote the team and help build relationships between audit and the business.
An overview of our Internal Audit Plan template is included below as a guide to how your plan can be laid out.
This is only an extract of some pages from the template. To download a free copy of the entire Internal Audit Plan template, please CLICK HERE. Alternatively, to download an editable version of the Internal Audit Plan, please CLICK HERE.
The template uses a combination of both text and graphics. This is to not only keep the reader engaged, but to also help explain the process in a simple way without providing large amounts of text.
In addition to the above, you may wish to include some of following items in your plan. Some of these are already included in this template, with other topics included in other templates such as the Annual Strategic Plan.
Overview of the audit universe;
List of previous audit activity;
Details of possible future risk areas and their inclusion in the annual plan;
Overview of the audit team and current resourcing; and
Maturity map - showing where we are now and where we want the business to be with regards to governance and controls.
Throughout this entire process, it is important the audit remains open to challenges on what the risk areas and challenges are within the business. It because of this, that adopting a transparent approach can assist in ensuring both management and the audit committee are on-board and have bought into the current annual plan.
To download a free copy of the Internal Audit Annual Plan, please CLICK HERE.
To download an editable version of the Internal Audit Annual Plan, please CLICK HERE.