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[Music] [Music] [Music] so friends hello and welcome this standard in this video we are covering the internal auditing standard 2020 communications and approval this is a very important standard and part of the international professional practices framework as issued by the institute of internal auditors this is those mushtaq an audit strategist and control specialist i have over two decades of experience in audit controls fraud examinations and forensic reviews if you're new to my videos the objective of my videos on audit and assurance series is to promote the internal audit profession in its basic spirit whereby the internal auditors having a clear understanding of the standards and the ippf overall so they can achieve the mission of internal audit as defined by the institute of internal auditors so as per our customary practice before we get off get off to a start let's ask some interesting questions from ourselves how to assess the type and quantity of resources required how itemization of orders is helpful in this assessment what is a step-by-step process for communication with senior management and board criteria that would characterize a significant change should be agreed with whom and as per standard 2020 what are the benefits of discussion with the senior management and last but not the least what chief audit executive submission to board may include for internal audit plan [Music] the core requirement of standard 2020 is that the chief audit executive must communicate to the senior management and the board for review and approval purposes this is for the internal audit activities plan risk based audit plan and the resource requirements including the impact of resource limitations as well as any changes or any significant interim changes that the internal auditor may assess so what is the step-by-step process for communication with the senior management and board first the risk-based audit plan has to be prepared under standard 210 and then the chief audit executive determines the resources needed to implement the risk-based audit plan to say and set the priorities identified during the planning process as a third step the chief audit executive communicates to the senior management and the board the internal audit plan the internal audit activities resource requirements and impact of resource limitations what are resources and how resources are allocated for changes the resources may include people for example labor hours skills or we can say in man hours the technology that is the audit tools and techniques timing schedule availability of resources for that and the funding a portion of resource is usually reserved to address changes to the audit plan that may arise such as unanticipated risk that could affect the organization and request for consulting engagements from senior management and or the board for example the need for a new internal audit project may arise when new risks are introduced due to an organizational diverse diversity devastations or mergers political uncertainty or changes in the regulatory environment it is helpful if the chief audit executive the board and the senior management agree in advance on the criteria that would characterize a significant enough change to warrant discussion and on the protocol of for communicating such changes it may be helpful to record these criteria in the internal audit charter or any other document let's review now how the assessment of the type and quantity of resources required is conducted the chief audit executive usually atomizes the orders that comprise the internal audit plan and then assesses the types and quantity of resources that would be needed to accomplish each audit project estimates are generally based on past experience with a particular project or comparisons can be can be made with the similar projects in order to determine the resource limitation and any gaps the chief audit executive can compare the resources needed to accomplish the plan's priorities with those available to the internal audit activity to determine whether any gaps exist this comparison can be used as a basis for determining the impact of the resource limitation now a very important area is let's understand the benefits of discussion with the senior management the chief audit executive typically meets with individual senior executives for their input regarding the proposed internal audit plan before it is formally presented to the board for approval during the meetings the chief audit executive can address any concerns that senior executives may express incorporate their feedback and obtain their support the process may involve gathering additional information about the timing of the proposed audit engagements and availability of resources it might introduce changes that affect the scope of work the inside the chief audit executive acquires from these discussions are really helpful and add value actually to the whole exercise and determine whether any adjustments should be made to the internal audit plan before it is presented to the board for approval the chief audit executive's presentation of the international plan to the board usually occurs during a meeting which may include senior management what does it mean that because it has gone through the discussions with the stakeholders and the senior management when you're presenting to the board there are no surprises for the senior management they are really aware of and they have already discussed the plan very well so there will not be any resistance from the management when you're getting the approval as you have made you have made all the adjustments which have been discussed with the senior management what an internal audit plan may include let's have a review of that a list of proposed audit engagements and specifications regarding whether the engagements are assurance or consulting in nature rationale for selecting each proposed engagement for example risk rating time since last audit change in management and other areas or other parameters which which you may use objectives and scope of each proposed engagement and list of initiatives or projects that result from the internal audit strategy but may not be directly related to an audit engagement what are resource limitations and how they are affecting resource limitations affect the priorities of the internal audit plan for example if resources are not sufficient to complete every proposed engagement in the plan some engagements may be differed and some risk may go unaddressed during the board presentation the chief audit executive discusses the proposed internal audit plan and the risk assessment on which it is based indicating the risk that will be addressed as well as any risk that cannot be addressed due to resource constraints board members then can discuss this information and make recommendations before ultimately approving the internal audit plan internal audit plan should be flexible for subsequent adjustments the internal audit plan is developed with enough flexibility so that the chief audit executive can adjust it as necessary in response to changes in the organization's business risk operations programs systems and controls however the chief audit executive must review significant changes to the audit plan related rationale and potential impact with the board and senior management to obtain their approval regularly scheduled meetings provide opportunities to review and adjust the internal audit plan how you can demonstrate conformance to the standard 2020 communications and approvals let's have a review of that the chief audit executive may demonstrate conformance with standard 2020 by keeping records of the distribution of the internal audit plan board meeting materials that includes the internal audit plan as proposed for review and approval individual discussions with senior management could be documented through memos emails or notes made during the internal audit activity activities risk assessment process typically board meeting minutes contain records of the board's discussion and approval of the internal audit plan any entire changes and impact of any resource limitations so this concludes our discussion on standard 2020 communication and approval hope you have got a good information about what the what is the requirement of internal auditing standard and the relevant implementation guides and how we will be practically using the this standard when we are working on our plan and when we are communicating our core areas for approval with the senior management and the board please keep viewing my channel keep sharing my videos subscribe my channel and like my videos and keep supporting me give me a good feedback and if you have any critical comments please uh feel free to share that so that will help me in improving uh in in my communication of the internal loading standards and on the whole the international professional practices framework in a better way thank you so much [Music] and