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Thread Title: Audit Dep't/Auditor KPI's
Created On Thursday February 21, 2008 5:38 AM
  Audit Dep't/Auditor KPI's
  Audit Dep't/Auditor KPI's
  Audit Dep't/Auditor KPI's
  Audit Dep't/Auditor KPI's
  Audit Dep't/Auditor KPI's
  Audit Dep't/Auditor KPI's
  Audit Dep't/Auditor KPI's
  Audit Dep't/Auditor KPI's
  Audit Dep't/Auditor KPI's
  Audit Dep't/Auditor KPI's
  Audit Dep't/Auditor KPI's
  Audit Dep't/Auditor KPI's
  Audit Dep't/Auditor KPI's
  Audit Dep't/Auditor KPI's


Moose


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Thursday February 21, 2008 5:38 AM

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I wanted to ask everyone what some of their favorite Audit Department and Auditor KPI's are? I personally don't like financial kpi's as I think they give a bad impression and some Auditors might try to focus in on high value items.

Some that I like are:
- % of recommendations accepted
- % of recommendations implemented
- % of key recommendations accepted
- % of key recommendations implemented

What are some that you guys like to use or have been used on you? I am trying to get new ideas.


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cat641


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Thursday February 21, 2008 9:16 AM

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Moose:

My current job has no kpi's but here are a few we had at my last job.

1. Authorized vs. Actual Staffing: Compares the number of actual to the number of authorized positions by team and identifies net vacancies.

2. Changes to the Audit Plan and Contributions to the Audit Plan: These schedules summarize the status of audit plan completion by team, staff productivity, and changes to the audit plan (eg., unscheduled, cancelled, or postponed audits).

3. Status of Audits Requiring Follow-Up: This schedule identifies follow-up audits that are in-process at month-end; it also identifies those follow-ups which are not yet started. The schedule tracks adherence to the follow-up policy.

4. Timeliness of Audit Reporting: This schedule identifies audit reports issued outside of the 75 day average and 30 day guidelines. The 75 day category measures the timing of the audit from the auditee perspective (from actual fieldwork start to final report issuance). The 30 day metric determines the effectiveness of planning and efficiency in report writing (from planned fieldwork end to final report issuance).

5. Financial Reporting: This schedule monitors the Audit Division's status of the financial plan, actual expenses to plan. These are financial kpi’s we CAN control!

If I think of any oothers I'll add.

Cat

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planoisdaudit


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Friday February 22, 2008 9:50 AM

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Wow, somebody still uses KPI's in their position descriptions!

I agree with Cat that the KPI's have to be things that we control. The problem I see with your KPI's are that we don't control recommendations accepted or implemented. Those are management actions. Putting those particular KPI's in your position description invites auditors to compromise on audits for the sake of getting a high acceptance and implementation rate for recommendations.


Some of the ones that I've used in past positions:

-Knowledge of professional standards: The auditor has attained and maintained sufficient knowledge of professional auditing standards (stipulate the acutal ones you use such as IIA or GAO, etc.) through obtaining relevant professional certifications and attending appropriate CPE
-Adherence to professional standards: The auditor demonstrates proficiency of professional standards by timely, accurate, and complete documentation of audit projects in accordance with local policies and the XXX (IIA, GAO, etc.) standards
-Communication: The auditor is proficient in written and oral communications. Written products are gramatically correct; free from errors in usage and mechanics; and understandable in a single rapid reading. Oral communications are tailored to the audience, clear, and concise.
-Technically proficient: The auditor is technically proficient and knowledgable. Here you want to talk about particular skills you want to emphasize such as knowledge of GAAP, GAAS, statistical sampling, etc.

I'll assume your KPI's will in some way be tied to performance evaluations. Therefore you need to write ones that you will actually be able to track. The ones I've mentioned above should be readily tracked through your normal audit training and audit supervision processes.

Good luck

-------------------------
Dan
Integrity can be defined as your moral soundness. A test for integrity - Do your actions match your words?

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Griff


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Friday February 22, 2008 11:24 AM

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One of the best ways to judge an auditor is to ask the people who have been audited. OK, there are always those who dislike auditors and will give a bad report however good you are. In my experience, most people involved will give an honest, fair assessment of an audit. If they don't, you should be asking why. Did the auditors clearly explain why and how the audit was being done, or have they something to hide?

-------------------------
David Griffiths
www.internalaudit.biz

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Moose


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Sunday February 24, 2008 3:35 AM

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Planois,

you said

"Wow! somebody still uses KPI's in their position descriptions!"

I have only worked in organizations that track KPI's. Does your quote mean I am behind the times!! :-)

If I am, can you tell me what your current experience is in regards to tracking Audit department/Auditor performance?

Thanks for the insight.

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planoisdaudit


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Tuesday February 26, 2008 11:13 AM

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Actually, in five posts as a CAE in four different industry segments; I only had one post that used KSI's in the auditor position description. That was a U.S. federal government agency.

That being said, I don't thik KSI's are a bad way to go. It just not something that seems to be currently emphasized by the HR world at the moment.

We actually have a separate performance appraisal process that is not tied to position descritpitions at all. Rather, we tie to the COSO strategic planning process as follows:

-Annually, I review and update strategic goals for the IA department with the Audit Committee
-Annually, I update deparment level objectives to support the strategic goals for the department
-Annually, I develop performance appraisal standards tied to: (1) Department Goals and Objectives, and (2) individual training needs for each auditor
-Quarterly, I meet with each auditor on their specific performance. During this review I give them a snapshot of what their performance appraisal would read if it were to be completed at that time. This gives all of us a chance for mid-course corrections to maximize the performance rating for each individual.

The way I support my quarterly review is to keep a set of desk notes based upon the reviews of auditor workpapers I perform throughout the year. That way, if there is a problem, I can point them back to specific audit projects and review notes.

-------------------------
Dan
Integrity can be defined as your moral soundness. A test for integrity - Do your actions match your words?

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valen


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Friday March 20, 2009 5:45 AM

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I have a problem. My Univeristy is setting a new performance appraisal for everyone, auditors are not exempted, unfortunately.

Percentage of draft audit report issued to customers within 10 WDs of audit fieldwork completion.

One of the KPIs I proposed to my boss is the above, something on timeliness of audit reports. He replied and put a comment there - "How do I know it's within 10 days?". Basically, he is trying to ask, how does he know our end of fieldwork. Sometimes, due to extended sampling, or extended scope or other issues arise that require us to either shorten or lengthen the audit period, then the end of fieldwork will be out.

Also, where do you record your last day of fieldwork, so that it serves as a document to prove that we have achieved our 10 days level of service (LOS) from the time of last day of fieldwork till draft report?

How do you guys monitor this? How do you give your bosses confidence that you are not manipulating your achievement?

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bigkell


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Friday March 20, 2009 7:46 PM

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Doesn't your "boss" know the end of your fieldwork? What's his KPI?

I would assume fieldwork might be consider ended at the time of the "exit interview." (I always had an exit, before I left the site, and before I wrote the report).

One dreaded KPI is monies saved/recovered -- recommend you don't do this one.

Implemented recommendations as a percentage of all recommendations.

Seems your performance "pre-KPI" has been satisfactory -- why the angst about the possibility the boss might think you are cheatin on the KPI time measurements.

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valen


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Sunday March 22, 2009 9:14 PM

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Yes, I have the percentage recommendations implemented against all recommendations too.

And other than the 10 working days to come out with the draft report, most of the other KPIs are deadline based. Meaning, If I meet the deadline, I get a "3" and if I finish earlier, I get a "4". But these kind of KPI is easily manipulated. I can hurry to finish it without considering the risks or other factors. I can also limit the samples.

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valen


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Sunday March 29, 2009 11:03 PM

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what do you guys have as KPIs other than deadline based targets?

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JanetFike


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Monday March 30, 2009 9:35 AM

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Valen,
Some non-deadline-based KPIs:
- IA costs vs. budget
- number of audits completed compared to plan
- % of time staff spends on fieldwork vs. prep vs. training vs. admin tasks, etc.
- % audits related to compliance vs. financial reporting accuracy vs. ad hoc requests, etc.
- average time to publish IA report after close of fieldwork

More difficult to quantify are KPIs based on auditee/stakeholder satisafaction, but if one used a survey with a rating scale, it would be possible to at least compare relative satisfaction over time, among groups, etc.

Agree with BigKell about metrics based on cost recoveries/cost savings. This is a dangerous road one should avoid if possible.

Janet

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planoisdaudit


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Tuesday March 31, 2009 11:52 AM

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Those are great KPI's Janet!

-------------------------
Dan
Integrity can be defined as your moral soundness. A test for integrity - Do your actions match your words?

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gmerkl


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Tuesday March 31, 2009 1:15 PM

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I agree with Plano that Janet's KPIs are great and are probably what most audit committees are interested in.

Usually the CAE needs to present his annual audit plan and budget to the audit committee (or whoever his or her boss is) and needs to get the audit committee (AC)'s approval. As a consequence, the AC probably wants updates as where you stand versus those approved objectives.

The number of audits, the % of time staff spends on fieldwork vs. preparations vs. training vs. admin tasks, the average time to publish IA reports after the close of fieldwork (wrapup time) and the % of audits related to compliance vs. financial reporting accuracy vs. ad hoc requests are all input factors that you need to draw up your audit plan and your budget. They will help you to explain why you are below or above your budget (especially if the AC changes their mind during the year and want changes to the audit plan or have ad-hoc requests).

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valen


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Wednesday April 01, 2009 9:28 PM

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OK, I have these as my KPI:-

Target means, if I achieve the deadline or %, I get a 3. If better, then I get a 4. 5 would be excellent (completed report 2 months ahead of schedule?).

Please let me know what you think?

Assessment Area, Target
1. Critical risk areas audit fieldwork completed
- Asset, May 30

2. Critical risk areas audit fieldwork completed
- Purchasing processes, July 31

3. Critical risk areas audit fieldwork completed
- Revenue collection (ICQ), Sept 30

4. Percentage of draft audit report issued to
customers within 10 WDs of audit fieldwork
completion (from last day of fieldwork signed
off by auditee), 80% compliance

5. Percentage of final audit report issued to
VC within 10 WDs (from date audit response
finalised & discussed with all auditees/DVC-
confirmed by emails), 80% compliance

6. Completion of Audit & Risk Plan for 2010, Dec 25


Edited: Wednesday April 01, 2009 at 9:34 PM by valen

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DISCUSSIONS > IIA GENERAL DISCUSSION AREA [ REFRESH ]
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