(Jakub Żerdzicki – @jakubzerdzicki | Unsplash)
State-owned enterprises and government institutions manage budgets, assets, and a range of activities that need continuous oversight. Internal audit is one of the important instruments for making sure those processes follow policy, for managing risk, and for supporting good governance.
Physical documents, spreadsheets, and separate data storage make it hard for auditors to gather audit evidence. They also get in the way of tracing examination history and monitoring the follow-up of findings.
An internal audit application for state-owned enterprises exists to help the SPI, APIP, and other oversight functions manage the audit process digitally. Read this article through to the end to learn the features, benefits, and how to choose an application that fits your organisation's needs.
What Is an Internal Audit Application for State-Owned Enterprises?
An internal audit application for state-owned enterprises brings the whole oversight process into one digital system. The audit team can therefore manage examination planning, risk assessment, working papers, recording findings, and follow-up monitoring in a more structured way.
In practice, this application can help the Internal Supervisory Unit (SPI) of a state-owned enterprise, or any other internal oversight function, keep examination data in one system. Auditors can manage engagements, document examination results, set corrective actions, and monitor their completion status.
A digital system makes it easier for leadership to monitor audit progress and findings that remain open. Through the system, leadership can also identify operational areas that need closer attention.
Why Do State-Owned Enterprises & Government Institutions Need One?
Internal oversight at state-owned enterprises and government institutions covers many activities, risks, and documents that need managing. Auditors also have to work through all of those documents at regular intervals.
When examination information is scattered across various documents and systems, however, the oversight process becomes harder to monitor. An internal audit application can be a means of managing examination evidence, findings, and follow-up in a more structured way.
Governance/GCG Requirements
PER-2/MBU/03/2023 is the Ministry of State-Owned Enterprises Regulation on Guidelines for Governance and Significant Corporate Activity at State-Owned Enterprises. It sets out various governance aspects that need to be applied in managing such enterprises.
Management can use an audit application as a supporting means of documenting examinations, managing findings, and monitoring follow-up in a way that is more structured and easier to trace.
Strengthening SPIP & Internal Oversight
Government Regulation No. 60 of 2008 on the Government Internal Control System (SPIP) requires institutions to carry out internal control on an ongoing basis. This allows government to ensure the effectiveness of activities, the reliability of reporting, the safeguarding of state assets, and compliance with legislation.
Internal oversight covers audit, review, evaluation, monitoring, and other supervisory activities. In that context, an audit application can be used to help document the examination process and monitor oversight results and follow-up.
The Role of SPI and APIP/the Inspectorate
Internal Supervisory Unit (SPI) carries out the internal oversight function within state-owned enterprises. Meanwhile, The Government Internal Supervisory Apparatus (APIP) carries out the internal oversight function at government institutions in line with its authority.
An internal audit application for state-owned enterprises can help both functions manage engagement planning, working papers, examination evidence, findings, and follow-up in a more structured way within one system.
Essential Features of a Public Sector Internal Audit Application
(Giorgio Tomassetti – @gtomassetti | Unsplash)
An internal audit application for state-owned enterprises and government institutions needs to support the entire examination flow, not merely replace manual forms. A good system should help auditors from the moment they set audit priorities through to making sure the results are acted on.
Risk-Based Audit Planning (RBIA)
This feature helps auditors draw up an examination plan that takes account of the level of risk in each unit, process, or activity. Engagement priorities can be set from the results of the risk assessment, so audit resources are better directed.
Working Papers & Digital Documentation
Working papers, examination evidence, auditor notes, and supporting documents can all be stored in one system. Digital documentation makes information easier to trace when auditors carry out a review or need evidence from a previous examination.
Findings Management & Follow-up
Audit findings need to be followed by clear action. The application can help record findings, determine who is responsible, set a completion target, and monitor follow-up progress through to closure.
Dashboard & Reporting to the Audit Committee/Leadership
A dashboard presents information on engagement status, findings, the follow-up completion rate, and examination results in concise form. That information can help leadership see the areas needing attention without having to go through audit reports one by one.
Managing things this way aligns with the requirements of government internal oversight, which covers audit, review, evaluation, monitoring, and other supervisory activities as set out in Government Regulation No. 60 of 2008.
Benefits of Implementation for State-Owned Enterprises & Government
Adopting an internal audit application can help the oversight function reduce administrative work and centralise examination information in one system. The benefits are felt not only by auditors but also by leadership, who need information in order to decide on corrective steps.
- Speed up the audit process because planning, examination, and documentation can all be managed digitally.
- Makes evidence easier to trace by storing working papers and supporting documents in a structured way.
- Improves follow-up monitoring because the status of findings, PIC, and completion targets can all be monitored in one place.
- Support decision making through audit information that is easier to read and to keep up to date.
- Reduce repetitive administrative work such as collating data and compiling reports manually.
- Strengthens oversight accountability because activities and examination results are better documented.
- Supports internal control by helping with the monitoring and follow-up of audit recommendations. Government Regulation No. 60 of 2008 itself provides that recommendations from audits and reviews must be acted on promptly.
How to Choose an Internal Audit Application for State-Owned Enterprises
- Make sure it fits your organisation's audit process
Choose an application that can follow the SPI or APIP workflow, from engagement planning and carrying out examinations to documentation and follow-up. - Check its risk management capability
The system should support risk assessment and the setting of audit priorities, so examination resources can be directed at areas of higher risk. - Pay attention to security and access settings
Audit data can contain sensitive internal information. Make sure the application has access rights configuration, so that auditors, leadership, and other users can only reach information within their authority. - Evaluate reporting and data integration capability
Dashboards and reports need to present information that is relevant to leadership. Integration capability also matters, so that the application does not create a new data silo within the organisation. - Consider implementation and development support
A good application is not only a matter of features. Consider too the vendor's readiness to help with system configuration, user training, maintenance, and development as audit needs change.
The choice of system should suit the organisation's scale and characteristics. For state-owned enterprises, governance and corporate activity also need attention, since PER-2/MBU/03/2023 is the governance guideline for state-owned enterprises and remains in force.
FAQ
What is an internal audit application for state-owned enterprises?
It is a digital system that helps the SPI manage the audit process — from planning and examination to documentation, recording findings, and follow-up.
Who can use an internal audit application?
The SPI of a state-owned enterprise, along with government internal oversight functions such as APIP and the inspectorate, can configure and use this application according to their own organisation's needs.
Can an internal audit application support risk-based auditing?
It can. The system can help auditors set examination priorities by level of risk, so engagements can be directed at the areas needing greater oversight.
What are the benefits of an audit application for SPI and APIP?
The application helps reduce administrative work, centralise audit documentation, make evidence easier to trace, and speed up the monitoring of findings and recommendations through to closure.
Can audit working papers be managed digitally?
It can. Working papers, examination evidence, notes, and supporting documents can all be managed in the system, so examination history is easier to trace.
How does the application help monitor audit follow-up?
Findings can be supplemented with the responsible party, a completion target, progress status, and evidence of follow-up. This helps ensure recommendations do not stop at the examination report. Government Regulation No. 60 of 2008 also provides that follow-up on recommendations from audits and reviews must be completed promptly under the established mechanism.
Is an internal audit application mandatory for state-owned enterprises?
It would not be accurate to describe any particular application as a regulatory requirement. Regulations govern governance, internal control, and the oversight function, while an application is a means that can be used to support them. PER-2/MBU/03/2023 on Guidelines for Governance and Significant Corporate Activity at State-Owned Enterprises is recorded as being in force.
What should be considered before choosing an internal audit application?
Consider how well it fits your organisation's audit process, its support for risk-based auditing, data security, working paper management, findings management, reporting capability, and the implementation support offered by the system provider.
Conclusion
Managing internal audit calls for a system able to bring planning, documentation, findings, and follow-up together in one workflow. Audithink helps the SPI, APIP, and other internal oversight functions manage the audit process in a way that is more structured and easier to monitor.
Want to know how Audithink can support your organisation's internal audit needs? Schedule an Audithink demo to see the features and system flow that can be adapted to your organisation's internal audit needs. Schedule an Audithink demo to see the features and system flow that can be adapted to the needs of state-owned enterprises and government institutions.
