2013

AUDIT COMMUNICATION 2
TOPICS:
1. Principles for report medium, report design and report structure and its significance 2. Merits of graphic presentations and its importance 3. Basic techniques for improving writing quality 4. Management strategies for preparing, reviewing and editing reports 5. Using multimedia: the future of audit reports

SUBMITTED BY:
Chuahong, Katrina Curammeng, Jerome Galapon, Sarah Flores, Julius Limpio, Mark Quito, Mark

SUBMITTED TO:
Christian Reyes, CPA, MBA

Group 6 Far Eastern University 8/14/2013

TOPIC 1 - Principles for report medium, report design and report structure and its significance Why Effective Business Reporting Processes Are Important High-quality business reports lie at the heart of strong and sustainable organizations, financial markets, and economies, as useful information is crucial for the various internal and external stakeholders who need to make informed decisions with respect to an organizations capacity to create and preserve value. As organizations fully depend on their stakeholders for their sustainable success, it is in their interest to provide stakeholders with high-quality reports. For example, effective reporting reduces the risk for lenders and may lower the cost of capital. Implementation of effective reporting processes is essential for organizations to be able to provide such information. In addition, high-quality reports also promote better internal decision making. High-quality information is integral to the successful management of the business, and is one of the major drivers of sustainable organizational success. Effective reporting processes should ensure that all internal and external stakeholders receive appropriate high-quality business reports in a timely fashion. This guidance is directed at all types of organizations wishing to enhance or improve their reporting processes, as all organizations, regardless of their size or structure, private or public, should have effective reporting processes to provide highquality reports for their internal and external stakeholders. Professional accountants in business are often involved in the design, planning, execution, audit, evaluation, and improvement (or, in short, the implementation) of their organizations reporting processes. This International Good Practice Guidance (IGPG) covers the main issues professional accountants in business should address in implementing effective reporting processes in their organization. Principles for Effective Business Reporting Processes The principles below represent good practice designed to ensure effective reporting processes in organizations. These principles do not prescribe a specific approach, but highlight a number of areas for specific consideration when implementing reporting processes. A. Committing to Effective Reporting Processes Senior management should assume leadership for high-quality reports through effective reporting processes. The governing body should demonstrate commitment to high-quality reports and provide strategic input into, and oversight over, the organizations reporting processes.

B. Determining Roles and Responsibilities The organization should determine the various roles, responsibilities, and consequential capabilities in the reporting process, appoint the appropriate personnel, and coordinate collaboration among those involved in the reporting process. C. Planning and Controlling the Reporting Processes The organization should develop and implement an effective planning and control cycle for its reporting processes in the context of, and in alignment with, its wider planning and control cycles. D. Engaging Stakeholders To ensure the provision of high-quality information, the organization should regularly engage with its internal and external stakeholders and understand their information needs with regard to past, present, and future activities and results of the organization. E. Defining the Reporting Content Based on the outcomes of its stakeholder engagement, and taking cost-benefit considerations into account, the organization should define the content to be included in its reports and also decide on the audience, layout, and timing of its reports. F. Selecting Frameworks and Standards The organization should have a process in place to ensure that the most appropriate reporting frameworks and standards are selected and that the requirements of those frameworks and standards are aligned with stakeholder information needs. G. Determining Reporting Processes The organization should determine what information needs to be captured, processed, analyzed, and reported, and how to organize the information processes and related systems for effective reporting. H. Using Reporting Technology The organization should (a) identify, analyze, and select appropriate communications tools and (b) decide how to optimize distribution of the organizations reporting information via the various communications channels. I. Analyzing and Interpreting Reported Information The organization should ensure that reported information is sufficiently analyzed and interpreted before it is provided to internal and external stakeholders. J. Obtaining Assurance and Providing for Accountability When obtaining internal or external assurance is not a matter of compliance, the organization should consider voluntary internal or external assurance on its reports and reporting processes.

K. Evaluating and Improving Reporting Processes The organization should regularly evaluate its reporting processes and systems in order to identify and carry out further improvements required for maintaining reporting effectiveness.

Relation of Reporting Principles Design Reports Design reports are written to introduce and document engineering and scientific designs. In general, these reports have two audiences. One audience includes other engineers and scientists interested in how the design works and how effective the design is. Another audience includes management interested in the application and effectiveness of the design. This web page presents a commonly used organization for design reports: Summary, Introduction, Discussion, Conclusions, and Appendices. Although this organization serves a wide variety of design reports, your instructor may very well modify this organization to serve your particular audience and purpose. Summary The summary, sometimes labelled the abstract or executive summary, is a concise synopsis of the design itself, the motivation for having the design, and the design's effectiveness. The author should assume that the reader has some knowledge of the subject, but has not read the report. For that reason, the summary should provide enough background that it stands on its own. Note that if the summary is called an abstract, you are usually expected to target a technical audience in the summary.

Likewise, if an executive summary is requested, you should target a management audience in the summary. For an example summary, see the following "Executive Summary." Introduction The "Introduction" of a design report identifies the design problem, the objectives of the design, the assumptions for the design, the design alternatives, and the selection of the design being reported. Also included for transition is a mapping of the entire report. Note that in longer reports, the selection of design is often a separate section. For an example, see the following "Introduction." Discussion The discussion presents the design itself, the theory behind the design, the problems encountered (or anticipated) in producing the design, how those problems were (or could be) overcome, and the results of any tests on the design. Note that this part usually consists of two, three, or four main headings. In regards to the actual names of these headings, pay close attention to what your instructor requests. Also consider what would be a logical division for your particular design. For an example section, see the following "discussion." Conclusions The "Conclusions" section summarizes the design and testing work completed and assesses how well the design meets the objectives presented in the "Introduction." Note that if the design does not meet the objectives, you should analyze why the design did not succeed and what could be modified to make the design a success. Besides summarizing the work and analyzing whether the objectives were met, the "Conclusions" section also gives a future perspective for how the design will be used in the future. For an example, see the following "Conclusions." Appendices In a design report, appendices often are included. One type of appendix that appears in design reports presents information that is too detailed to be placed into the report's text. For example, if you had a long table giving voltage-current measurements for an RLC circuit, you might place this tabular information in an appendix and include a graph of the data in the report's text. Another type of appendix that often appears in design reports presents tangential information that does not directly concern the design's objectives. If the appendix is "formal," it should contain a beginning, middle, and ending. For example, if the appendix contains tables of test data, the appendix should not only contain the tabular data, but also formally introduce those tables, discuss why they have been included, and explain the unusual aspects that might confuse the reader. Because of time constraints, your instructor might allow you to include "informal" appendices with calculations and supplemental information. For such "informal" situations, having a clear beginning, middle, and ending is not necessary. However, you should still title the appendix, place a heading on each table, place a caption beneath each figure, and insert comments necessary for reader understanding.

Internal Audit Reporting Structure A strong internal audit function should report directly to the audit committee. Internal Audit may be administratively accountable to the CEO, but is functionally accountable and owes its loyalty to the Audit Committee, who recommend to the Board, CEO and CFO the appointment, evaluation, compensation (at least annually, including incentive structure) and retention of the Head of Internal Audit. The Audit Committee should also have a say in reassignment or replacement of senior staff, and review and approve the mandate, work plan, budget and resources for this function. The audit committee should help the head of internal audit to function independently from management and to be objective in the reporting of factual findings to the committee. Any action taken regarding Internal Auditors work or status should be approved by the audit committee to avoid the internal audit staff becoming dependent on the management. The head of internal audit (including senior staff) should not engage in operational duties or non-internal audit transactions or oversight and should have direct access to the audit committee chair. The audit committee should also ensure that follow up of corrective action is taken by management in response to an internal audit report and matters raised are tracked, promptly resolved and reported to the audit committee. Audit report structure

TOPIC 2 - Merits of graphic presentations and its importance Graphic Presentation Graphic presentation enjoys numerous forms of expression ranging from the written word to the most abstract of drawings or statistical graphs. When expressed in other than the written word, it affords an important medium of expression which, in health education helps to clarify literally, verbally, or statistically presented health information. The purpose of this medium is to enliven and delineate information by presenting it in concise manner and in such form or pattern as will be helpful to understanding. While this medium may be used alone in advanced study in many fields, it is, more often than not, used in support of, or in clarification of, data that are otherwise presented. The purpose of the chart is to provide a concise summary or to compare, to contrast, to suggest relationships, or otherwise to explain. It is not a substitute for data; that is, it does not take the place. Thus it is a symbolic form which, while representative, is explanatory. It may vary in pattern from the simple to the complex depending upon its type, colour arrangement, and the amount of detail that it presents. Its value in health education, as in genera usage, is usually in direct proportion to its simplicity. The graph is a chart form that is used to present statistical data and to present the relationships between variables. While the terms "chart form" and "graph" are at times used interchangeably, the fact that use of the graph is restricted to the presentation of numerical data sets this form apart from other graphic forms which, though enjoying broader scope as to presentation, are limited in their possibilities for presenting quantitative data. It is this distinctive function of the graph that tends to set it apart from the chart, although it remains a chart form. As with the chart, it is simplest form that serves the intended purpose and is usually productive of best results. Definitions of Graphs and Charts A graph or chart is an instrument to present statistical information in symbolic fashion. The chart is used to represent numerical data as well as material in abstract form. In addition a certain type of chart may be considered a picture of a portion of the earth's surface. Historically speaking, graphs probably had their origin in pictures. Many old paintings and engravings represent saints and royalty in large figures with halos surrounding them whereas persons of less importance are represented in smaller size. In other words, a persons social status was conveyed to the reader by means of a graphical technique.

Advantages and Disadvantages of Graphic Presentations Advantages: Simplicity in reading the data. It is an efficient method of showing large numbers of observations. The results are more easily remembered. A visual impression is more permanent than sets of figures of words. Completeness in presentation. Complex relationships can be demonstrated easily and quickly so that the whole situation is presented simultaneously. Clarity and emphasis in presentation. By the use of colour and other devices, one can emphasize certain places. For example, a rising death rate might be pictured in red to bring out the aspect of danger involved. Popular appeal. One need not consult surveys or psychological test results to learn that the table of statistical data may be quickly skipped over but a lively chart will attract and a certain amount of learning.

Disadvantages: A sacrifice in precision. A graph can be used only to show large or crude variations in the date. Lack of flexibility in the event new combination of the data seems appropriate. This follows as a result of the first disadvantage and is one of the reasons why it may be advisable to present the original data in a table or text accompanying the graph. Distortion of the situation may result from the desire to oversimplify the material. This may be intentional or otherwise. Construction of a graph or chart may be difficult or costly. This should only apply, however, to large scale drawings which are employed as posters to educate the lay public or similar groups.

The Data or Tabular Chart The data chart is used to present data in summary or tabular fashion. It is, in fact, a table that brings together data that are arranged in such fashion as to simplify their interpretation or make possible their further delineation in chart or graph form. The preparation of a table or data chart is a necessary first step in the preparation of other more vivid and refined charts which will further speed up the interpretation and enhance understanding of the basic data.

The Gantt Chart A Gantt chart is a type of bar chart, developed by Henry Gantt in the 1910s, that illustrates a project schedule. Gantt charts illustrate the start and finish dates of the terminal elements and summary elements of a project. Terminal elements and summary elements comprise the work breakdown structure of the project. Some Gantt charts also show the dependency relationships between activities. Gantt charts can be used to show current schedule status using percent-complete shadings and a vertical "TODAY" line as shown here. Although now regarded as a common charting technique, Gantt charts were considered revolutionary when first introduced. In recognition of Henry Gantt's contributions, the Henry Laurence Gantt Medal is awarded for distinguished achievement in management and in community service. This chart is also used in information technology to represent data that has been collected.

The Tree or Stream Chart In its simplest form, this chart may consist of the outline of a tree with the trunk and branches appropriately marked to indicate source or origin and growth and development of any kind, e.g. the "family tree". As such, it is sometimes described as a pictorial growth Chart. In its complex form, it may, through careful and detailed drawing,

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delineate the multiplicity of operations involved in the production and transportation of food, water, or medical supplies.

The Organization Chart The purpose of the organization chart is to depict the structure of an organization. It may be used to indicate the administrative or functional relationships of component parts of the structure or both. The organization of a municipal, country, state or federal

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official health agency is usually shown in this form of chart. It is one of the simplest of the chart forms and is commonly used by many agencies in organizational planning.

The Flow Chart The flow chart or flow diagram is used to depict the movement or flow of functions, materials, or services of an organization, or to illustrate the directions of flow of interagency responsibilities. The qualities of the organization chart and the flow chart are sometimes combined to produce an organization and flow chart. Such a chart may serve the dual purpose of showing the manner of agency organization and the flow of functions or services from its component parts.

Company Online Product Process Flowchart

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The Bar Chart or Graph The bar chart or graph is without doubt the most commonly seen of the many chart forms used in presenting the relationships between variables. Among its many, patterns are the simple bar and the compound, multiple, relative, and pictorial bars, all of which may be structured in either the vertical or horizontal planes. Varicoloured and multi-coloured bars may be used depending upon the number of variables shown. Hatching may also be used to have an advantage in most bar chart forms; but in paper charts, this is time consuming activity which, if not carefully done, may result in optical illusions and resultant confusion rather than clarity. Both colouring and hatching are effective and are readily accomplished when the board is, used to present the bar chart or graph. Bar chart or graph forms enjoy popular usage in health literature. Especially is this the case when birth, death, or morbidity rates are under consideration since comparisons of birth and death rates, case incidence and fatality rates, or specific morbidity and mortality rates are readily visualized with the help of these graphic presentations.

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Histogram or Column Diagram This is a graph on arithmetic paper for presenting data in frequency distributions. The height of each interval is indicated by a column. It should be used only when the data on the horizontal or x-axis are measured on an interval or ratio scale. If data have been grouped into intervals unequal in size (such as 0-4, 5-9, 10-14, 15-24 years of age), this type of graph is the one most suitable. If the graph is one involving rates, such mortality or morbidity, the occurrence of unequal intervals does not require a histogram. The conversation to a common base for comparison purposes has already been accomplished in the obtain rate because the denominator takes this factor into account. In construction of the histogram, it is preferable to convert frequencies in each interval into percentages. Thus, comparisons of the height of a column in one distribution are not influenced by the total numbers of observations and enable comparisons between histograms. It also overcomes the objection of divining the frequency of larger intervals into fractions of a unit.

Component Band Chart A variation of the bar chart is extremely useful when two or more sets of percentages are to be compared by graphical means. When only one set of percentages from nominal scale data is under study for comparisons within the set, earlier discussion indicated preference for the pie chart. When there is more than one

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set, however, the comparison, between two pie charts is not easily made. In its place, a convenient graph is the component band chart.

Pictorial Statistics This is popular variation of the bar chart. Instead of using a plain column, the length of the bar is composed of a series of small identifying symbols. Each symbol may be used to represent a fixed number of items. The number of items is determined by the variable being graphed and this in turn determines the length of the bar. Some general rules in their construction are as follows: Use descriptive and suggestive symbols when possible. For public health work, some recommended symbols are figures of a man, woman, child, bed, wheelchair, nurse, doctor, coffin, etc. (For a complete listing of all symbols see catalogue from pictograph corporation. No address is available, however, it may be out of business. There should be legend explaining the number of units for which each symbol stands. The number of units for which a symbol stands should be in round numbers, 5,10,25,50,100, etc. It is permissible to split a symbol into portions to show a number less than one unit. Represent differing amounts by varying the number of symbols instead of the size of the symbol, Distortion will result if the size of the symbol is changed.

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Each symbol should be the same size - called isotype. The space between symbols must also be constant.

The Line Graph This graph makes possible the presentation of data with a high degree of accuracy. In fact, careful work and use of the proper coordinate paper makes it possible to show the exact reproduction of numerical data, a quality not given to all forms of graphic presentation. Since different types of lines may be used in tracing the data, two or more illustrations, may be presented on the same graph. However, the graph is easily over-burdened. The compilation of more than two or three records on the same graph is not advised.

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The Pie Chart or Graph This circular presentation enjoys general usage and is probably familiar to all educational workers. Its purpose is to present percentage or fractional differences within a single geometric pattern. Its used as a mnemonic device aids in the retention of information. The use of this form is effective in presenting quantitative data in an interesting and colourful manner. When a single circle is used it is called a simple pie chart or diagram. When two or more concentric circles are used, it is described as a concentric pie. In the latter case, its possibilities are further enhanced, although the degree of abstraction is increased as circles are added, as the number of pie slices or sections is increased, and as a variety of the hatching styles are used in the same pie. It must be emphasized that the pie diagram should not be used haphazardly. Since fraction or percentage differences are to be distinguished, numerical values must be clearly shown and superfluous words should not be allowed to clutter up the pie. Colour may be used to advantage for identifying one or more of the pie slices.

Frequency Polygon This is actually a type of graph which comes under the classification of the arithmetic scale line graph. It is used, to present data in the form of frequency distribution. This type of graph is the only one suitable if one wishes to compare two frequency distributions. Even thought the size of the intervals may be unequal, (indicating, the histogram) When two (or more) frequency distributions are to be compared the frequency polygon is needed. If the intervals are of unequal size, one

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must modify the level of the point which is plotted in accordance with the rules for the histogram. If more than one line is placed on a single graph, one can distinguish between the lines by colour, or making one of the lines broken, one solid, one dotted, etc. These different types of lines should be explained in a legend or key. As in a histogram, the frequency polygon is best plotted when the data in the intervals of the frequency polygon is being employed is compare the shape of two frequency distributions, the use of percentages is mandatory. Since the two frequency distributions may have differing total numbers of observations, a valid comparison of the shapes of the frequency polygon can be made only when the vertical scale is in percentage form. Some authors recommend that at each end the line be brought down to zero at the, middle of the adjoining intervals. This is to show that, the total area or percentages under the curve are equal to unity. In some cases where the frequency distribution has values starting at zero because of the scale of measurement, this creates a ridiculous situation and can be avoided by omitting these terminal lines.

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Scatter Diagram This is a special type of graph often useful to the research worker in pointing out relationships or associations.

How to use the charts Construct or select charts that rate high on each at the following criteria: Is the material closely related to the topic to be discussed? Is the material interesting? Is the material useful in attaining an objective of the program? Can the material be understood? Make sure that the letters, figures, pictures and other material on the charts are large enough to be seen by all members of the group. Make sure that all charts are accounted for and arranged in the right sequence.

When presenting charts, the following suggestions should be kept in minds: Present all of the material on the chart before discussing the information on the page. This will give the learners an over view of the material on the page before discussing the parts. Use a pointer to indicate the item being presented. Stand at one side of chart; never block its view. Keep eyes on audience as much as possible. Glance at chart only briefly. Avoid too much leader talk. Try to get learners to think and to discuss.

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TOPIC 3 - Basic techniques for improving writing quality

Everyone has their own strategies and techniques when it comes to writing. Some people only write in the morning, while others only write after midnight. Regardless of when you write, the end result is the quality of the final product. People judge a written work using their own critiquing methods. This is important to know, because right up front you are not going to please everyone. Considering reader critiquing methods and the fact it is impossible to please everyone, the best approach is to produce quality work. This can be accomplished by using strategies and techniques, which help produce a written work accepted by as many people as possible. There are many strategies and techniques for achieving a goal of acceptability. Here are some techniques: Punctuation Pay attention to punctuation; especially to the correct use of commas and periods. These two punctuation marks regulate the flow of your thoughts, and they can make your text confusing even if the words are clear. Wordiness For example, in a sentence where you say you will have to replace it with you must, or Click on the Go button to can be replaced with Click Go to.Think of words such as enables, instead of allows you to or Helps you to. If one word will work where three are, replace it! When the finished with writing go back and purge. Creating and Editing are Different Do not edit while when creating the first draft. Make a deal with your internal editor that it will get the chance to rip your piece to shreds at the end. Read Others Written Work Use others writers sentences and paragraphs as models and then emulate the syntactic structure with your own content. This can help with learning grammar and punctuation. Read the Work Backwards When Editing This technique helps focus on misspelled words and missing words.

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Avoid He/She Said Instead of using he said/she said to every bit of dialogue by identifying the speaker showing him/her in action. For example: Pass that sweet-smelling turkey this way. With knife in one hand and fork in the other, Sam looked eager to pounce. Read the Work Aloud After editing the work on screen or in print, read the text aloud. Awkward sentences and errors that slipped through earlier edits show up readily when reading out loud. Go Back and Edit Previous Work Edit your older articles and pieces. You will notice growth, and it will allow you to refine your style and avoid mistakes. Accept Criticism Remember not everyone will like your work and while others do like your work they may offer suggestions for improvement. Accept these suggestions graciously and reflect on the comments. Watch out for Homonyms Homonyms are words that share the same spelling or pronunciation, but have different meanings. Switching effect with affect or plane with plain could be catastrophic, so pay attention to them. Be concise and be clear Tight, concise, easy-to-read pieces are heaven for readers. Long, complex, convoluted ones are just confusing. Very often, the longer you write, the less you hold a readers interest. If you cant say it simply in just a few words, then youve lost readers. Write short, write lean, and write clearly, so you dont have to waste words explaining what youve just written. Be Honest You dont want to be mean and insult people when you write, but you should be honest and bold enough. In other words, dont be afraid to tell the truth in your writing. Wanting to please everybody all the time may make your writing dull and boring at times. On the other hand, once you are known to be a writer who is honest and tells

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the truth about things it will help you be a better writer, because people will always trust what they read from you. Dont Be Afraid to Tell What you Think Now this one could almost be included in the being honest section but I think its a topic of its own. Not to be afraid to tell what you think means that you dont have to agree with everyone all the time. A good writer usually writes what he or she thinks. As a matter of fact, you shouldnt be writing if it wasnt to tell what you think. Its OK not to agree with everyone else if its how you feel, and its OK to say it as you see it. Read Just Before you Write Writing ideas are induced be reading. Yes, thats a very easy trick. Especially if you feel that you dont know what to write about. Reading before you are due to write is an excellent remedy for the blank page syndrome. This is due to the fact that the act of reading a lone, even if its totally unrelated to your topic, will help you to be in a writing mood and turn you into a writing mode. Take Risks Whatever niche you might be in, dont be afraid to take risks when you wr ite. It will boost your writing. Think Value If you write with value in mind you will write useful pieces that will drive more attention, and it will help you improve your writing as well. Value calls for good writing because it forces you to write with a purpose which is always a positive factor for writing quality. Be Human and dont be Afraid of your Flaws People love to read from someone that they can recognize as a real human being. Its a law of this world that humans tend to relate to other humans and nothing is less attractive than a writer who writes with no feeling and no emotion. Always put a little bit of who YOU are in your writing, and dont be afraid to talk about your flaws at times. People are flawed and like to read about other peoples flaws. This is a gre at way to help you write better.

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Techniques for improving Writing Quality in Audit reports Communicating audit results effectively requires both knowledge of the subject and knowledge of the audience. The new administrations emphasis on transparency and goals to achieve open government will result in an increase in the amount and type of information being shared with the public as well as the medium for transmission. Not only is it important to employ a direct writing style, it is equally important to persuade the readers to take action and implement changes. Why write audit reports? Required by Standards. Inform - Tell what auditors found. Persuade - Convince management of worth and validity of findings. Get Results - Move management toward change and improvement. Characteristics of a Good Audit Report It complies with Yellow Book standards. It achieves its purpose. It is clear. It lets the reader know the severity of the problems. It lets the reader know how to correct the problems. The Reporting Process Begin your enhancement of audit reports by examining your internal reporting process. o WHO drafts report content o WHEN and HOW do they draft o WHO reviews/edits/revises the report content o WHO assesses content for supportability based on audit documentation? o HOW and WHEN is the revised draft shared with the audit team? o WHO approves changes made to the original draft? o WHO signs off on the finished version of the report? Ensuring/Achieving the 3 Cs Concise identify key point(s) and prioritize Complete determine what types of information (and how much) are needed to support each key point Clear consistently apply standards for coherent written communication Strategies for Audit Reports Expand your message into an Executive Summary. Make sure it includes most important points from outline. Draft the body using your summary memos and outline. Flesh out each finding, making sure each one has all the elements. Then, add transitions.

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How to Write A Quality Assurance Report or Audit Well written quality assurance report is very important to implement total quality systems in the organization. With increasing competition and stricter government regulations, quality systems have become an integral part of the organizations. One of the most important steps in implementing quality systems is conducting audits. Audits give a clear picture of how the quality systems are implemented in the organization, to what extent they are being followed and how effective they are in improving the quality of the products and services. An audit report conveys the results of the audit to the concerned people in the organization and at times to the top management, as well. Based on the audit report, various strategic decisions are taken regarding product quality, wastage, execution time of orders, customer requirements, etc. This means that an audit report is one of the most important Q and A report since it acts as a feedback and results in corrective and preventive action. Given here are few points that should be adhered to while making audit Q and A report . Easy To Understand Language The report should be well written in simple language. This not only enables the concerned people to understand the content of the report but also results in effective communication, better decision making, and proper implementation. Abstract The first step is to give brief summary of the audit report. It should be clear and concise. The audit reports are circulated to heads of various departments, top management, engineers, and the supervisors on the shop floor. A summary gives idea of what is there in the full report and hence when a person reads the summary, he/she can decide whether they want to go through the entire content of the audit report or not. This saves the precious time of the employees. Background Information The audit report should contain all the information like the date of the audit, the name of the department where the audit was conducted, the name of the official who conducted the audit, the purpose of the audit and so on. Findings The audit should give complete details of the findings. If any calculations are done, then those should be shown in a separate section or attached to the quality assurance report.

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The content of various audit reports varies based on the type of audit. Like the quality management system audit report states the observations with reference to the clauses of the standard or the department manual whereas the process audit report states the observations with reference to the code of practice defined for that process. Inferences The findings are compared with standards to check whether different quality systems are being followed properly in the organization or not. Any deviations in the system should be highlighted. Use graphics to make points clearer and explicable. The inference is a very important part of the audit report as the senior management takes the decision based on it after consulting the engineers and managers. In short, audit Q and A report plays an important role in the continual improvement of the organizations quality management system. Urgency drivers for improving Audit reports 1. Increased visibility Audit results are distributed to a wider range of both internal and external stakeholders, each with varying needs. Auditors need to ensure the audit report does not overstate or understate risk and that it provides an accurate picture of the risk and control environment. 2. Demonstrate credibility Internal Audit continues to review more complex, strategic risks. This means auditor understanding of the business and associated risks has to be properly demonstrated within the audit report. 3. Avoid ratings clustering The tendency to cluster results at the mid-point of audit ratings leads to an inadequate reflection of actual risk exposure. 4. Articulate business value - Stakeholders often feel audit results are not directly linked to their business priorities or urgent enough to address in a timely manner. Many audit departments make basic mistakes that detract from the usefulness of their reports. Most of these mistakes are easy to fix. Defining a report template, using clear examples of good writing and streamlining the editing process are examples of quick improvements you can make.

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TOPIC 4 - Management strategies for preparing, reviewing and editing reports

What are strategies? According to the famous Webster dictionary, the word strategy means artful means to some end. Thus a strategy is essentially about discovering artful or imaginative means to achieve our ends or goals. The concept of strategy was originated from the lexicon of armed forces, where strategy implies the science of planning and directing large-scale military operations, (as distinguished from tactics) of maneuvering forces into the most advantageous position prior to actual engagement with the enemy. Like many concepts in modern management, the concept of strategy was first adopted by the private sector in its pursuit to win commercial battles with its competitors. Later, it trickled down to the public sector and is being applied by governments to win their wars against poverty, underdevelopment and social injustice. Strategies are plans for achieving organizational goals. The importance of strategies cannot be overstated; an organizations strategies have a major impact on what the organization does and how it does it. Strategies can be long term, intermediate term, or short term. To be effective, strategies must be designed to support the organizations mission and its organizational goals. Benefits of developing a strategy Corporate success depends on developing an effective strategies and implementation. Planning or strategy is a prerequisite before a company starts with its initiatives and practices. This way management is able to chalk out a route for the company. Management also sets goals and targets. The success or failure of the enterprise, to a large extent, depends on how well strategies have been formulated. Difference of strategy and tactics Strategies are plans for achieving organizational goals. It is therefore roadmaps for reaching the destinations which provide focus for decision making. Tactics are the methods and actions used to accomplish strategies. They are more specific than strategies, and they provide guidance and direction for carrying out actual operations, which need the most specific and detailed plans and decision making in an organization. Management strategies for preparing, reviewing and editing a report Always remember that when writing a business report, keep in mind that it is a business report that are given to a busy and intelligent manager. It is not an academic essay. Do not waste time and paper reproducing information from the case study. In particular, do not bore your "client" with a long history of the organization you are studying. You should assume that they have read and understood everything in the case study. Your job is to add value to that information. Remember that a report, like any other good piece of writing, tells a story in an interesting and coherent way. There should be a clear flow from one section of

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your writing to another, and each part of the report should draw upon what has gone before, and feed analysis forward to what follows. Do not assume that, if you write down the entire theoretical models one after the other, you have done your job. You need to acquire the ability to select the relevant parts of each analysis (and only the relevant parts) and put them together so as to answer the question you have been set. Avoid jargon. Write simply and concisely, avoiding unnecessary use of theoretical terms. Avoid adjectives like "huge", "massive" or "disastrous". Use a number instead "50% growth per year" which makes your analysis seem more considered and credible.

Format There is no set format for a report, but typically it should contain the following: An Executive Summary. This is, as the name suggests, a summary containing all the main findings and conclusions, so that a busy executive can get a flavour of what the report says and decide whether or not s/he needs to read it all. It is not to be confused with the Introduction. An Introduction. This sets the scene for what is to follow. It should contain: a brief (1-2 paragraphs) summary of the events which have led to the report being written the terms of reference or objective of the report a description of the method the report follows to achieve this objective An analysis of the data in the case, a description of the findings and conclusions from the analysis and your recommendations (if you are asked for them). This does not mean that you need sections or chapters called Data Analysis, Findings and Recommendations. You may want to use jazzier terms than this, and if you are dealing with two or three issues in one report, it may make sense to group the analysis, findings and recommendations on one issue together before tackling the next. Please make sure that the pages are numbered; you are also advised to number the sections in the report. This helps you make cross-references from one part of the report to another, which can help save you words by avoiding repeating in one place what you say again in the next. Appendices Appendices are there to supplement the points you make in the main body of your report. They contain data that is useful, but not essential, or they may discuss subsidiary points that are relevant and demonstrate the depth and breadth of your thinking. The reader should not have to look at appendices in order to understand your conclusions and the reasons that you have reached them the main body of the report should contain all the key points and essential supporting evidence. If you need to support your argument with quantitative analysis, the results should be summarised in tables included with the main part of the text.

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If you do put something into an appendix, it is vital to include, at an appropriate point, a reference to it (e.g. " see Appendix 1" or "Appendix 2 contains a detailed breakeven analysis of our proposals"). If you dont ask people to look at something, dont be surprised if they don't bother! Graphics It is good practice to use appropriate charts and figures to summarize data and findings, and you may get extra credit for doing so. However: Make sure that your report makes sense as a stand-alone document. If you use a figure or a chart, make sure that its message is clear - or add some narrative to bring out the point Don't use graphics for their own sake - a pretty chart that says nothing of importance will lose you time and probably marks as well. Simply plotting the firms sales or profit figures on an Excel graph rarely adds anything why not pick out an interesting ratio, like profit margins or sales per employee, and use a graph to show how it has been behaving over time Make sure you use the right kind of graphic for the job. Dont use a pie chart for a time series use a line graph or a bar chart. Flashy presentation is not a substitute for clear thinking. A nice cover and colored charts may put a few marks on to the grade of a good piece of work, but will not rescue a poor one. Tables A well-designed table or matrix is an excellent way of summarising data succinctly, particularly when you are trying to compare things, for example: competition in an industry at different stages in its evolution the features of different products the performance of different firms the resources possessed by a firm with the survival/success factors in an industry the features of different businesses within a diversified corporation. Sometimes, the very process of putting facts side by side in a table will expose important similarities or differences that you had previously overlooked. It may also alert you to gaps in your data or analysis. Language - keep it simple! A senior manager is quite likely to be an engineer or accountant with little or no theoretical background in strategy, economics or organisation studies. You should not assume that your reader understands the secret language in which management theory is often encoded. Some concepts, like economies of scale, barriers to entry and core competences, have become part of everyday management vocabulary, but if you start talking about "time compression diseconomies" or "agency costs" then you are unlikely to be understood. You should, of course, use all these concepts when developing your analysis. When you write up your report, however, you have to find simpler ways of expressing your findings. For example, you may have identified a source of cost advantage, a lack of vertical integration in manufacturing, as a distinctive element in a company's value

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chain. What you say in the report is that the firm "keeps costs low by outsourcing manufacturing to carefully selected partners" - you don't need to mention vertical integration, or even the value chain! If you must use jargon, make sure you use it correctly! Sloppy use of concepts like economies of scale, vertical integration and substitutes is quite common, and will cost you valuable marks. Make sure it is clear what you are recommending... If you are asked for a particular decision or recommendation, make sure that it is clearly stated (i.e. not just implied) in the report. You may have come up with fifteen good reasons why the company should enter the market in Utopia, but unless you clearly state that that is what you recommend, you have not fulfilled your brief - and will probably lose marks. Make sure that, in developing recommendations: You have considered the alternatives. There is hardly ever just one, single "obvious" response to a strategic problem. And bear in mind that, if there is, all the companys competitors will have thought of it, too! You have made it clear why the recommendation you have chosen is the best of the available alternatives. That means showing what is wrong with the others! You have looked at the downside of your proposals. Try to avoid proposals that would bankrupt the company if they failed, or which can be easily copied by the competition. Make sure that, above all, you submit work that: is intellectually thorough is well structured is coherently and logically argued answers the question

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TOPIC 5 - Management strategies for preparing, reviewing and editing reports

2.
Using Multimedia: The future of audit report The use of computer technology in auditing is not consistent across companies or even within organizations with branch operations and separate audit groups. Some audit organizations are leaders in adopting, and deriving the maximum benefit from, new technologies. Others are taking a more cautious approach to implementing the new technology. Many organizations exist somewhere in the middle of what can be called the audit technology continuum. An audit organizations place on this continuum is based upon the degree to which auditors and audit management have integrated the use of CAATTs into their audit operations. There are four distinct regions along the continuum: introductory, moderate, integral, and advanced. The regions can be characterized according to the degree to which general software, audit software, and audit management and administrative software are used. Introductory use of Technology o Used by audit management. o Administration: budgeting, time reporting, and text processing. o Automation has been on the edge of the main audit function. o Focused on automating basic audit task rather than addressing new or different requirements. Example: e-mail, word processing for preparing audit reports and working papers, and spreadsheets for managing the audit divisions budget o The audit process has not changed. o Most audit related tasks are still performed manually. o Technology is not anticipated, planned for, or considered in either the short- or long-range plans of the audit organization. Moderate use of Technology o Used by limited number of individual auditors. o Data extraction and analysis for a few audits; limited use of spreadsheets and presentation software. o Technology is not used by all audits, nor is it consistently applied or managed in a centralized manner. o Resulting records are manually reviewed rather than analyzed electronically. o The application of technology is still isolated to specific tasks rather than integral to the entire audit function. Integral use of Technology o Used by all auditors and audit management. o All audits, all phases, to define the audit universe and annually identify and assess risk electronic working papers and distribution of audit reports.

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o Computers are used in more sophisticated ways to improve the efficiency and effectiveness of the audit process. Example : Extraction and analyses of client data in support of specific audit objectives. Automation of the administrative functions of the audit organization. Establishment of an electronic library of audit-related reference materials. Automation of working papers and cross-referencing of source documents. Development of databases summarizing several years worth of client data for critical or key information systems to be used for trend analysis, audit planning, or early-warning systems. Advance use of Technology o Used by all auditors and audit management. o Continuous auditing for ongoing identification and assessment of risk and to perform assurance audits; extensive use of intranet. o Audit organizations become involved in the design and development of new and innovative uses of technology. o The nature of the audit function is substantially different. o Information technology is utilized to the fullest extent in order to maximize the benefits of the audit to the audited organization.

General Software Useful for Auditors The use of technology by auditors requires not only a change in the mind-set of auditors, but also a degree of comfort and familiarity with the technology and the concepts. The use of general software to support audit, such as text processing, spreadsheet, and graphics, while beneficial in its own right, will also introduce auditors to more relevant technology. Even if the organization is going to remain at the moderate stage of the continuum, the auditor can make better use of the technology already available. Simple word processing software can become more than a text processor and more integral to the audit function when looked at from a different perspective. Word Processing o A simple word processor allows the user to enter and manipulate textual information. o Text can be reformatted on the screen to change the layout to the format the writer feels will have the greatest impact. o Allows the writer to manipulate the text using simple commands to copy, move, or delete the text as required. o Speeds up drafting process, as the entire document does not need to be retyped every time a correction is required. o All members of the audit team can be actively involved in the production of the final report.

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Members of the team can work on different chapters, and the overall document can be easily be pulled together at a later date. o Draft reports can be edited using redline; document compare features can be used to identify the changes; and version control can be tightly maintained. o Final reports will benefit from the flexibility and clarity of electronic formatting, laser printing, and the integration of text with graphics and even color printing. o Word processors have the added advantage of exposing all auditors to the computer, as well as building confidence in technology. o Word processors are being packaged with a wider array of capabilities. Most are equipped with a thesaurus. Spell-checking features, as well as reporting incorrectly spelled words, will also suggest alternative spellings. Style or grammar checkers to assist in ensuring that audit reports are clear and concise. Include an outliner that can be used to plan the structure of the entire document. o Other possibilities for word processing software include the automatic production of confirmation letters using mail merge capabilities to improve the production efficiency and final look of the letters, and the use of standardized working paper, report formats, and templates to reduce the time required to format the final report. Text Search and Retrieval o Text search and retrieval is achieved in two ways: Some packages index words in documents and can therefore perform fast searches of all files for specific words or phrases Others carry out the scan of all files for the required text as the query is entered into the system. The indexing packages are obviously faster in operation, but have an overhead in storage requirements, as the indexes often take up as much space as the documents themselves. The pure search and retrieve packages are slower, but do not have any additional storage requirements. Both types of packages allow the user to retrieve all instances of a word or phrase. Spreadsheets o Spreadsheet software gave users the ability to automate many of the functions of business administration and accounting. o An electronic spreadsheet is like an automated calculator that can work in two or more dimensions. A spreadsheet consists of rows and columns. The intersection of each row and column forms a cell, and these cells form the basis of

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the spreadsheet. They can contain text, numbers, formulae, or even programmed instructions (macros). Combinations of these types of cells can be used to build applications. Rows, columns, or blocks of data can be summed, sorted into sequence, moved to other locations, or copied. Spreadsheets can be linked to other spreadsheets. o The spreadsheet format of data presentation is so natural that it has also been used by audit software to facilitate various views into any, and practically all, electronic data files and summarizations of the data in diverse ways. o Spreadsheets can be used by audit management to track budgets or to record time and billing information o Spreadsheet products generally include the ability to: Track changes to spreadsheets, including changes that cross multiple spreadsheets Create and maintain access and segregation of duties controls; Control versions Produce audit trails. o Other features may include Workflow Spreadsheet-development tools Spreadsheet archiving Analytical reporting o The overall goal is to combine the user-friendliness and widespread use of spreadsheets with a centralized control infrastructureto reduce the likelihood of errors. Presentation Software o The use of presentation software can help auditors deliver their message in an interesting and condensed format. o Presentation software can help improve the quality and utility of the exit debrief to the client. .Concepts or recommendations that are complex are often more easily presented in graphical format rather than straight text. Graphics and the use of color can make audit reports more readable and understandable. The appropriate use of graphics can focus the readers attention on the audit findings and key recommendations. o These presentations include audio and visual (digital pictures and movies) components. o Auditors should use graphics and video to assist the reader in understanding the text, not as a replacement for the written word. o Too many fonts, pictures, or the use of sound and animation may distract from the main message of an audit. Flowcharting o Flowcharting is used as one technique that enables the auditor to analyze the procedures and identify controls (or the lack thereof).

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o Auditors can produce audit flowcharts using the Rutterman standards, computer flowcharts, or even data flow diagrams. o Flowcharting software can be used to illustrate many relationships, such as organizational charts, flowcharts for computer software or applications, network diagrams, process flows, decision trees, and cause-and-effect relationships. The resulting diagrams can consist of one or more pages and can be automatically sized or resized. o Flowcharting critical processes can help identify key control points and can be used to produce process and data flow diagrams. Of course, the flowcharts can be reused for the next audit of the client or for audits of similar operations. Standardized Extractions and Reports Often, similar information is required for diverse audits. Sometimes the only variable that changes is the location or branch. Rather than writing new programs to extract the information each time an audit begins, it is often more efficient to develop standardized reports. Of course, modern audit software facilitates such designs and customizations in various ingenious ways. Audit software can be used to create executable jobs (also called scripts or macros) to perform repetitive tasks, such as combining monthly files to create a year-to-date picture at any point in time. The standardized reports can be used by auditors to access the key information systems, such as finance, personnel, inventory, payroll, payables, and compensation and benefits. Various types of standard reports can be developed, including high-level summaries and detailed listings of transactions meeting certain thresholds. High-level summaries will give the auditor an overview of the audit entity for use during the planning phase. Detailed reports will more likely be required at the conduct phase to review specific issues or concerns. When starting to build standard reports, it is a good idea to obtain a copy of the data dictionary, preferably in electronic format, and ensure that you have an adequate understanding of all the data fields. A good understanding includes knowing: What kinds and types of data are stored in the system? What possible values do the fields contain? Where did the data come from? What information is derived from the data and what does it mean? How is the data administered, protected, and secured? How is the data and the information used by (senior) management?

This knowledge will help you in designing report contents and layout formats based upon your own data naming conventions. The information gathered can go considerably beyond the data stored in the original computer files, and the extraction routines can easily access more than one type of data file. If appropriate, consider developing a catalog of standard reports for use by all auditors. The catalog could list all standard reports (purpose, layout, description, and possible uses) and provide a sample printout for each type of report. This type of documentation is useful to all auditors, but particularly to new audit staff who are trying to develop an understanding of the various

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application systems. Of course, by knowing the information requirements of the clients management, it will be possible to generate various management reports with the same ease and to suggest even better ways of keeping informed. Todays audit software was designed as meta-software, such that it provides the same or better answers to critical questions about organizations and their data (Will [1996]). In organizations where auditors are using CAATTs effectively, the clients often also acquire audit software to be used as a management tool after the audit is completed. Reporting Phase - Benefits During the reporting phase, the use of automated tools can result in more effective audit reports with fully developed statements of significance. Sample error rates can be extrapolated to the entire population; presentation software can be used to prepare the results for final debriefing; graphics software can be used to produce tables and charts, which can be included in the final report; and word processing software can be used to produce the final reports. The end result is a report that is more accurate, complete, timely, and easier to read and understand. This directly contributes to the overall acceptance of the audit findings and the image of the audit organization. Further, methodologies, findings, and final reports can be captured in audit knowledge databases, providing auditors with access to the information. This can improve the planning process for other audits and assist in the follow-up audits. The reporting phase can be made less time-consuming and more informative and clear through the use of CAATTs. Future audits can benefit from the knowledge gained by current audits, and audit can improve the management of audit findings and recommendations.

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SOURCES:
http://vcmdrp.tums.ac.ir/files/audit/pages/PDF/Audit/i+a+tse.pdf http://www.profitablestorytelling.com/47237/how-to-write-a-book/what-are-12-easy-ways-toimprove-writing-skills/ http://suite101.com/article/10-writing-tips-for-improving-your-skills-a70573 https://www.ifac.org/sites/default/files/publications/files/Principles-for-Effective-BusinessReporting-Processes.pdf http://www.dehradun-icai.org/seminar/internal%20audit%20report%20writing%20part%20i.pdf http://surenrajdotcom.wordpress.com/2012/12/09/internal-audit-reporting-structure/ http://www.uwlax.edu/faculty/brooks/bus230/handouts/designing%20graphs.pdf http://www.totalqualityassuranceservices.com/how-to-write-a-quality-assurance-report-or-audit/ http://apipa2009.pitiviti.org/files/effective_audit_report_writing_material.pdf

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