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Compliance audit reviews are used to examine an organization's process and procedures. These reviews are in accordance with contractual agreements and/or government regulations. Compliance reviews expose possible problem areas that present the possibility of fines and litigation. Compliance audit reviews involve auditees and auditors.
Corporations can hire certified public accountants or certified internal auditors to perform compliance audit reviews. An individual, however, does not have to be certified to perform or write a compliance audit report review.
Compliance Audit Reports
Determine the Compliance Audit Objectives
Construct the audit objectives and criteria. Determine what the audit will accomplish and establish the method that will be used to create the objectives. The criteria of an compliance audit consist of specific requirements that auditors use to measure their findings. Objectives and criteria can be based on company priorities or state requirements and guidelines.
Define the Scope of the Compliance Audit
Define the scope of the audit. The scope of a compliance review report entails the constraints of the audit. For example, the scope illustrates the process and activities that will be examined. It also depicts the location and period of time the audit will cover.
Identify the Compliance Auditor and Auditee
Identify the auditor and auditee. An auditee is an individual or company that is being audited, and an auditor is the individual or organization performing the audit. Provide background information on the auditor and auditee.
Determine the Audit Logistics and Timetable
Determine the audit logistics and timetable. Logistics explain how the audit was carried out and address any issues that may hamper the execution of the audit. The unavailability of staff would be a potential problem. The timetable of the audit consists of the dates, times and locations of where meetings will take place.
Select the Compliance Audit Team Members
Select the audit team members. The lead auditor determines the personnel on the audit team. The lead auditor will choose participants who have knowledge of the auditee and the scope of the project. These individuals assist the lead auditor with audit planning, evaluations and reports.
The lead auditor will define team roles according to the expertise of the individual. Once this is determined, the lead auditor can construct the roles and responsibilities of the audit team.
Report Compliance Audit Findings and Conclusions
Report audit findings and conclusions. The compliance audit report is the result of the compliance audit in relation to its scope and objectives. It includes a summary of information and can consist of further observation. It also points out areas of compliance and non-compliance, as well as areas for improvement.
- Environment.nsw.gov, Compliance Audit Handbook
- Minnesota OSA: Examples of Auditor's Reports on Compliance
- KPMG: Effective report writing for internal auditors
- IRS. "The Examination (Audit) Process." Page 2. Accessed May 4, 2020.
- IRS. "Tax Audits: Triggers and Tips." Page 5. Accessed May 4, 2020.
- Daily, 2014.
- Michael, 2014.
- Habib, 2014.
- National Association of Enrolled Agents. "What is National Tax Practice Institute?" Accessed May 4, 2020.
Marcus Cage began writing professionally in 2008. His work has been featured in magazines such as “COFFEA Magazine” and “Simply Amazing Organizing.” He has also been the creator and distributor of business materials. Cage holds a Bachelor of Science in business administration from DeVry University.