This highly-interactive Blackbird training course will show you how to deliver measurable benefits to your business by focusing audit attention on areas of opportunity and added value and be seen as a success driver and a catalyst for positive change.
It will help identify the over-managed risks and unnecessary areas of control which are invariably overlooked by management and learn the skills and techniques to positively change the perception of the audit function.
Course Objectives of Opportunity Auditing
Apply the theory and practice of opportunity auditing
Deliver real cost savings to the business
More than cover the costs of your function with these cost savings
Plan assignments effectively to focus on opportunity as well as risk
Audit business areas which may have not been previously covered
Assist management to simplify and streamline processes
Measure performance in a more business centric manner
Day 1
THE PRINCIPLES OF OPPORTUNITY AUDITING
What is Opportunity Auditing?
How does it differ from other audit approaches?
Opportunity or Value for Money Auditing
The Key Questions
Does your Internal Audit function add measurable added value to your organisation?
Do you specifically evaluate and report this added value?
Are you happy with this process?
Do you measure the value of monetary savings made as a direct result of your audits?
Have these savings been at least double the cost of your function in each of the past 2 years?
Are these savings known to and recognised by management?
Does your audit programme target areas of opportunity as well as risk?
Do you carry out any specific value for money audits?
Do VFM assignments account for more than 5% of the annual work programme?
How did you score on the questions?
The Relationship between Opportunity and other Types of Audit
The Benefits of Opportunity Auditing
Performance Auditing Guidance
The Associated Dangers e.g. trying to quantify non-quantifiable savings
Exercise 1 – The challenges
The 3 E’s
The 3 E’s – The Cornerstone of Opportunity Auditing
Economy and How it can be Evaluated
Minimising the Cost of Resources whilst Maintaining Acceptable Quality
Examples of Poor Economy
Efficiency and How it should be Assessed
The Relationship between Inputs and Outputs and the Use of Resources
Why it is critical to evaluate efficiency? – with examples
Effectiveness and How it can be Assessed
The Degree to which the Goals or Objectives are Met
The Measurement of that Achievement
Identification of Inputs and Outputs
How to measure the 3 E’s?
Exercise 2 – Assessing the 3 E’s
Key Steps in Completing an Opportunity Review
How to select the topics?
The Research Phase
Objectives, Methodology and Techniques
Establishing Terms of Reference
Defining the Boundaries of the Review
Gathering of Information
Evaluation of Data and Effectiveness of Management Processes
Evaluation of Performance and Cost Saving Potential
Exercise 3 - Determining the opportunity audit objectives / scope
Opportunity Audit Techniques
The Range of Techniques
Comparative Analysis
Evaluating Effectiveness, Efficiency and Economy
Evaluating Productivity in Practice
Working with other Specialists
Measuring Opportunities
Opportunity Audits of Line Functions
Opportunity Reviews of Projects
VFM as an Investigative Tool
A VFM Audit Template will be Shared
Developing a Terms of Reference
Exercise 4 - Planning the audit approach
Day 2
IDENTIFYING OVER-MANAGED RISKS
Identifying Over-managed Risks
These are likely to be the Risks in the Green Zone of the Risk Matrix
Opportunity Management is a Business Enabler
The Flip Side of Risk
When did you last suggest reducing controls?
Challenge ‘We have always done it this way’
Do we have to do it?
What are the benefits / penalties associated?
Can we reduce effort in some areas to give time and resource for the priorities?
Exercise 5 - What areas would be useful to review?
Developing an Opportunity Register
The Need to Record Potential Opportunities
Adopting an Opportunity Matrix
Prioritising Actions to Deal with Over-managed Risks
Develop an Opportunity Register
Key Elements
Exercise 6 - The opportunity register
Choosing the Opportunity Audit
Risk and Opportunity Approach
VFM Audits should be Prioritized as other Audits
Benchmarking Techniques
Helps Organisations to Identify Areas where their Costs are ‘Out of Kilter’ with their Peer Group
Cross Sector Comparisons of the 3 E’s
They Assess the Issues largely from the Perspective of Past Performance
Most Common Opportunity Audit Topics
Travel Management
Mobile Communications
Insurance
Stationery
Energy Management
Budgeting
Meetings Management
Office Furniture
Exercise 7 – Selecting the VFM audit
Opportunity Auditing of Projects
The Need to Audit Projects as they Happen
Steps in a Project Audit
Auditing at the Feasibility Stage
Benefits of a Project Audit
Judging Success
Timing of the Audit
The Need to Assess the Risk Maturity of the Project
Reviewing Risk Registers
The Questions to Ask
Assessing Risk Appetite
Determining which Risks should be Concentrated on in the Audit
Management Evaluation of Mitigation Controls
Identification of Risk Exposures and Opportunities
Dealing with Them
Establishment of Action Plans
Reviewing Risk Ownership and Identifying Gaps
Identifying Residual Risks above the Risk Appetite
Looking for Ways to Enhance Efficiency and Better Manage Costs
Exercise 8 - The audit involvement in the project life cycle
Day 3
PERFORMING AN OPPORTUNITY AUDIT
Performing the Assignment
Audit Programmes with Examples
Walk through Tests
VFM Fieldwork Techniques
Audit Testing – How to decide the type and depth of testing?
Ask Personnel for their Frustrations and Ideas
Ask for Reports and Measures Already in Use
Ask about Measures they would like to See
IIA Guidance on Testing
Key Personnel
Spending Levels and Revenues
Major Operations, including in the Field
Control Systems
Functional and Audit Objectives
Determining Sources of Information
Concerns Expressed
Opportunity Audit Working Papers
Exercise 9 - The opportunity audit in practice
Assessing Performance Measures
How to determine performance measures?
Good KPI’s
SMART Measures
Auditing Performance Measures
Audit Programmes in this Regard
Exercise 10 – Assessing Performance measures
Specific VFM Assignments – with hints and tips
Mobile Telecommunications
What are the objectives?
What are the risks?
How to compare bills, tariffs and added value benefits?
Hardware vs. Airtime Costs - How to evaluate?
Understanding the Trends in the Market
Identifying the Inputs and Outputs
What measures of the 3 E’s would you expect?
Travel Management
Building a Picture of Travel Costs - Travel Recording and Management Reporting
How to gauge the effectiveness of a travel policy?
Evaluating Policy Compliance and its Financial Impact
Evaluating the Service Provided by a Travel Agent
The Need to Get the Best from Suppliers
How to evaluate savings potential?
Budgeting
Evaluating the Costs and Time involved in Preparing a Budget
Steps in Agreeing a Budget
Buy in to the Budget Process and the Final Budget
The Forecasting Process and the Link to Budgets
Ways to Improve the Process
How to evaluate savings potential?
Insurance
Evaluating current Spend
Assessment of Number of Claims
Evidence of Controls required by the Insurer
Use of Captives
Assessment of Self-assurance
Could any areas be over insured?
Procurement
Procurement Strategy
Framework for Purchasing Decisions
Key Supply Needs
Consolidated Purchasing Opportunities
Over-assessment of Needs
Purchasing Cards
Emergency Contracts
Specialist Purchasing
Legal Requirements
Expert Advice
Marketing
Products and Services
Target Market
Place
Pricing Strategy
Processes
The Physical Environment
Assessing Effectiveness
KPI’s
Outsourcing Arrangements
Agencies, Consultants and Suppliers
E-marketing
Customer Snalytics
Exercise 11 – Audits will be chosen by the delegates and the audit planned using the approach outlined
Day 4
OPPORTUNITY AUDITING LINKED WITH THE TRADITIONAL ASSURANCE ASSIGNMENT
Auditing Systems under Development
Why auditing systems under development need not compromise your wider audit role?
The Need to Audit at Key Stages – not to be part of the project team
Ensuring that the Processes and Policies are Complied With
Determining the Points of Potential Failure and Areas of Opportunity to Streamline
Ensuring Controls are Not Bypassed – due to time constraints
Ensuring Risks and Opportunities are Identified at the Start and Regularly Reviewed
Ensuring Sufficient End-user Involvement
Audit Stages and the Questions to Ask
Exercise 12 – The benefits of system development audit
Auditing Brand and Reputation
The Rise of Reputation
The Increasing Importance of a Positive Image – the need to be admired
Where does reputation come from?
How do you measure it?
The Magnifying Effect on Reputation of Business Success
Global Brands
How to judge reputation?
Identifying Reputational Benefits and Challenges
A Checklist for Reviewing Reputation will be Provided to All Delegates
Exercise 13 – Auditing business reputation
Understanding and Hopefully exceeding Stakeholder Expectations
Who are the stakeholders?
Are stakeholders’ expectations known?
Arranging Meetings with all Stakeholders
Workshops with key stakeholders?
Are the expectations clear?
How can you meet the widely differing expectations?
Are there any areas where expectations could be exceeded?
Are there any quick wins?
What reports should IA provide to stakeholders?
A New Paper on Working with Stakeholders will be Shared
New Advice on Auditing Strategy
What every Director should know about IA? – New Guidance
Exercise 14 - Meeting the ever expanding requirements of stakeholders – What should the IA role be?
The Opportunities by Fully Coordinating the IA Role with the Other Providers of Assurance
Ensuring Your Assurance Provider Roles e.g. Internal Audit, Compliance, Risk Management, Insurance, Security are coordinated to avoid duplication of effort
Why you should incorporate internal audit agreed actions in your risk register?
Ensure Environmental Risk is taken seriously even if you are in a sector such as Financial Services
Ensure that Your Business Continuity Plan Covers All Eventualities and Ensure it is Fully Tested
Identify New Ways to Benefit the Least able Section of the Wider Community You Serve
New Guidance on Coordinating RM & Assurance
Exercise 15 – The benefits and deliverables from Assurance Mapping
Day 5
STRATEGIC AUDIT PLANNING AND OPPORTUNITY AUDITING
Strategic Audit Planning – Covering both Risks and Opportunities
The Need for a Strategic Audit Plan
How to decide which areas to audit and how often?
New IIA Standard
Determining the Level of Assurance
New IIA Guidance – Production of the Audit Plan
Developing the Audit Universe – Issues to include
IT Governance
Expenditures with Cost Saving Opportunties
Ethics Programme
Outsourced Operations
Value for Money Assignments
Projects
Systems under Development
The World-renowned BRM Strategic Audit Planning Model (an electronic version will be provided to all delegates)
Determining the Audit Priorities
Separating the 3 Year Plan into Annual Plans
Dealing with Requests
Exercise 16 – Developing the audit plan using the model
Audit Analytics for Opportunity Audit
The Use of Analytical Tools
The Process of Data Mining
Applications of CAAT’s
Fuzzy Matching
Data Validation
Trend and Pattern Analysis
Neural Networks
Continuous Auditing and Continuous Monitoring
The Use of CAAT’s for Continuous Auditing
Benford’s Law and it’s Importance in Analytics
Auditing Big Data
Implications of IIA GTAG – Understanding and Auditing Big Data
The Use of Internal and External Databases
How to put the techniques into use in your organisation?
Practical Uses of Data Analytics and the Results Achievable
Exercise 17 – Use of data analytics in opportunity audit
The Opportunity Audit Report
The Challenges
The Need for Impact
How to grab attention?
What management expects?
Knowing What to Write
Convincing the Reader
Getting the Right Balance
Focussing the Report
Discussion of Implications
Benefits rather than Weaknesses
Audit Opinions
Words and Phrases to Use
Recommendations and Action Plans
Follow-up
Write a public review