In an organization or company, instead of auditing every area, you can use the universe audit as an effective measure.
This is because audit universe not only audits all auditable components in a company, but also based on risk calculations.
To better understand what an audit universe is and more information about this material, please refer to the explanation of the following article.
What Is Audit Universe
Audit universe is an examination of a set of components or units in an enterprise based on konsep risk-based audit.
Entities or components of this audit include processes, systems, and departments that can be audited or auditable in a company.
Based on these units, audit universe can map all areas that can be audited in a company based on the level of risk and resource efficiency.
This is certainly beneficial for the company because it can identify areas of internal audit that need to be prioritized.
The company will obtain important information on risk management and strategic planning from the audit process so that it can determine the level of risk, identify internal controls, and ensure compliance with regulations.
Easily, instead of auditing in every field, such as financial audits, audit IT, and a compliance audit respectively, the universe audit ensures that the entire area is not missed to be audited on a risk basis.
Read Also: Complete guide to the stages of Internal and external Audit
Benefits Of Audit Universe
Not only does it give efficiency to the examination of all components in one process, but also with regard to its effectiveness in allocating limited resources.
This is because the resources within a company are often limited, making it not efficient enough to carry out certain audits on an area.
From these explanations, it becomes clear that the application of the universe audit has many benefits for an organization or company, such as:
- Can identify each entity that can be audited, so there is no need to specify the area to be audited
- Can map risks, review internal control, and ensure compliance with regulations in each unit.
- Can prepare an audit plan as well as expose the consideration of audit priorities based on risk
- Can optimize limited resources more efficiently
Read Also: Audit Risk: definition, types, examples, and how to determine
Drafting Procedure
In its implementation, audit universe is intended for each area to be considered so that auditors can determine their risk-based priorities.
From the risk mapping, the company can finally prioritize the areas with the highest risk for auditing in order to identify potential problems and support the company's goals in the long term.
Here are audit preparation procedure universe that can help to support the growth of the company in the long term:
1. Understand The Purpose Of The Organization
This stage begins with the identification of the company's goals, which include the design of its strategy, tasks and objectives.
Next is to review the functions and business processes that support the company's strategic objectives.
2. Perform A Risk Maturity Assessment
The Auditor will review and understand the maturity of risk management and understand the development of its stages.
Such evaluation allows the auditor to ensure the audit plan will be in accordance with the needs and capabilities of risk management
Next is to ensure the universe audit is in accordance with the level and risk maturity profile of an organization
3. Build An Audit Framework
In this case, the auditor will begin by defining what will be included in its scope, covering its processes and operational areas.
After recognizing the scope of the audit, the auditor will determine the entity to be identified with this risk-based auditing.
4. Perform A Risk Assessment
At this stage will begin by collecting information in the form of interview data, previous audit reports, and related incident reports.
Then, it will be continued by identifying risks that include potential internal and external risks from all units in a company.
After the risk has been successfully recognized, the auditor with qualitative and quantitative methods will evaluate the possible impact of each risk that has been identified.
5. Applying priority to entities Auditable
Prioritization of risk will refer to the severity and possibility, so that in this case the resources can focus allocated to the unit with the highest risk to support the achievement of strategic objectives.
6. The Audit Universe
The process of compiling this audit report begins by documenting all auditable entities and their audited processes and functions. It is also accompanied by exposure to risks and reasons.
Furthermore, auditors can present reports to management or stakeholders for input and validation.
7. Finalisasi dan Approval
Make adjustments to the report based on input or feedback from related parties to achieve alignment with company goals.
Once completed, the draft can be immediately approved by a governance body, such as the Audit Committee.
8. Implement Audit Universe
As already explained, one of the objectives of the audit is to support the growth and sustainability of the company.
In this case, the company can integrate the approved universe audit as a guide in planning and determining the scope of the examination in the next audit.
The implementation of audit universe also allows resources to be allocated to prioritized areas or scopes.
9. Make Regular Repairs
At this stage, the auditor will continue to monitor changes in operations, strategy, and risk.
In addition, a review will be conducted annually to ensure the universe audit remains relevant and comprehensive.
Universe Audit Example
An example of the universe audit was carried out by the Ministry of Environment and Forestry as an annual internal audit work program which was then set on January 8, 2018.
The audit conducted by the MoEF focuses on determining the priority levels and objectives of the internal audit by considering the available resources.
The scope of this universe audit will include guidelines for preparing universe audits at Echelon I level, echelon II level at the Center, and UPT/ Technical Implementation Unit Level.
The preparation of the universe audit begins by preparing an audit profile, conducting a risk assessment, Assessing the risk factors for potential audit entities, and determining the ranking of potential audit entities.
Next is to develop a plan that includes the determination of the annual audit plan and schedule, audit map planning, and audit outcomes.
Conclusion
Such is a complete explanation of the universe audit that is applied based on the level of maturity of the company's risk.
Diantara tingkatan maturitas tersebut antara lain adalah risk naive, risk aware, risk defined, risk managed, dan risk enabled.
If your company wants to implement an internal audit, you can submit it to a professional and experienced auditor.
Such as Audithink which has served many clients in planning and implementing annual audit programs.
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