Learning Objectives:

•         Understand the purpose of an audit walkthrough and how it fits into the audit process.

•         Learn how to structure and conduct a walkthrough effectively.

•         Develop the skill of asking the right questions during a walkthrough + building and enhancing audit interviewing skills.

•         Role-play scenarios to practice and enhance auditing skills.

 

I. Introduction to Audit Walkthroughs (30 minutes)

a.       Definition, Purpose, and Types

b.      Benefits of Walkthroughs

c.       Structure of Audit walkthroughs

Definition and Purpose: Explain what an audit walkthrough is and its significance in the audit process.

Types of Walkthroughs: Differentiate between types (e.g., compliance walkthroughs, operational

walkthroughs).

Benefits of Walkthroughs: Discuss how walkthroughs help in understanding processes, identifying risks, and validating controls.

 

II. Structuring an Effective Walkthrough (45 minutes)

a.       Components of a good walkthrough: understanding the process flow, key controls, and documentation.

b.      Best practices: Preparation, engagement, and documentation.

c.       Common pitfalls and how to avoid them.

 

III. Developing Strong Walkthrough Questions (60 minutes)

a.       Open-ended vs. closed-ended questions.

b.      Techniques for eliciting meaningful information.

c.       Sample questions to uncover control weaknesses, process gaps, and risks.

 

IV. Understanding Key Audit Principles (30 minutes)

a.       Risk Assessment

b.      Control Environment

c.       Materiality

Risk Assessment: Teach participants how to assess risks associated with the process being audited.

Control Environment: Discuss the importance of understanding the organization's control environment

and culture.

Materiality: Explain the concept of materiality in the context of audit procedures and findings.

 

V. Effective Communication Skills (60 minutes)

a.       Listening Techniques and Clarification

b.      Non-verbal Communication

Listening Techniques: Highlight active listening and its role in gathering information during interviews.

Clarification and Probing: Teach how to ask clarifying questions to gain deeper insights into processes.

Non-verbal Communication: Discuss the importance of body language and tone during interviews and discussions.

 

VI. Documenting the Walkthrough (60 minutes)

a.       Documentation Standards and Templates

b.      Utilizing Flowcharts

Documentation Standards: Review best practices for documenting the walkthrough process and

findings.

Templates and Tools: Provide templates for documenting walkthrough results, including questions asked and answers received.

Utilizing Flowcharts and Diagrams: Teach how to create process flowcharts to visualize the workflow.

 

VII. Identifying and Evaluating Controls (45 min)

a.       Types of Controls and Evaluation Methods

Types of Controls: Discuss preventive, detective, and corrective controls relevant to payroll or other processes.

Control Evaluation: Teach participants how to assess the effectiveness of identified controls and suggest improvements.

 

VIII. Common Pitfalls and Challenges in Walkthroughs (45 min)

a.       Common Errors and Challenges

b.      Navigating Complex Processes

Common Errors: Discuss frequent mistakes made during walkthroughs and how to avoid them.

Challenges in Gaining Cooperation: Provide strategies for overcoming resistance or lack of cooperation from personnel.

Navigating Complex Processes: Offer tips for managing complex workflows and ensuring a comprehensive understanding.

IX. Audit Interviewing (90 minutes)

a.       Audit Interviewing Techniques:

1.      Prepare in Advance:

o   Review the payroll policies, prior audit findings, and flowcharts.

o   Develop open-ended and targeted questions for key payroll staff.

2.      Establish Trust and Rapport:

o   Start with easy questions to make the interviewee feel comfortable, such as asking them to describe their role in the payroll process.

o   Show empathy for the complexity of payroll processes, especially if they involve manual steps.

3.      Ask Open-Ended Questions:

o   Use questions that encourage the interviewee to describe processes and share insights.

o   Example: "Can you walk me through how payroll is processed for hourly employees, including how overtime is calculated and approved?"

4.      Follow-up on Key Details:

o   Probe for areas where controls might not be as strong.

o   Example: "How often are manual adjustments made, and who approves them?"

5.      Identify Potential Gaps or Risks:

o   Ask about challenges or exceptions they encounter in payroll.

o   Example: "What challenges do you face with ensuring accuracy in payroll, particularly regarding overtime or bonuses?"

X. Sample Walkthrough and Interview Questions for Payroll Process:

a.       Practical Exercises and Case Studies

b.      Role-Playing Scenarios

c.       Group Discussions

XI. Wrap-Up and Q&A Session (30 minutes)

a. Summary and Open Floor for Questions

Should be part of a Commonwealth audit or similar department