Test Plan and Audit Program Development

Assessing the operating effectiveness of Internal Controls over Financial Reporting is based on the results of audit tests.  The testing of Key Controls, as described in a subsequent phase of our Methodology, is simply the execution of the Test Plan and Audit Programs that are designed during this phase.  This is one of the most critical phases to coordinate with external auditors, to reach agreement on the testing approach.  If that coordination is effective, the external auditors can rely more heavily on the work performed by Management Testers, thereby reducing the level of work external auditors perform directly, and reducing audit fees.

The Precipio Group has expertise to design effective testing procedures and coordinate with the external audit team to obtain their agreement.

The Test Plan defines the Key Controls that will be tested, the population of items and time period subject to testing, and the sample size to be tested.  The Audit Programs provide detailed step-by-step audit procedures to guide auditors through the tests to be performed.  Good Audit Programs result in consistent audit procedures and conclusions regarding the pass/fail conditions for each test.  Poorly designed Tests Plans and/or Audit Programs might not provide an adequate basis for concluding on the effectiveness of controls.  For example, vague Audit Programs might leave too much room for judgment or interpretation by the auditor, potentially resulting in inaccurate or inconsistent conclusions.

The Precipio Group will design your Test Plan and Audit Programs, or review the ones you already have in place, to ensure they provide a reasonable basis for Management and external auditors to assess the operating effectiveness of Key Controls.