Management Audit Reports: Processes, Types, and Methodologies

Writing of Management Audit Report Writing of Management Audit Report Report Writing Dinesh Pant

Process of Management Auditing Step I: Preparing audit plan getting approval / informing the organization to be audited in advance Step II: Conducting field studies (auditing at workplace level), involving various methods of data collection /auditing Step III: Analysing / verifying data Step IV: Writing audit report (with required discussion before itys finalization)

Report Writing: What is it is actually? A report is a written statement or document prepared after a detail investigation / study / review /observation of a situation its state, causes, effect and solutions It is simply a narration of what happened to all concerned: A kind of story telling with coverage of: What was done How it was done What was found What was conclusions What was recommended / instructed (in case of auditing) What has been supporting evidence / references

Types of Report Based on Types Based Preparation Stage Investigative / research report Baseline survey report Feasibility study report Evaluation report Implementation progress report Audit report Any activity completion report Preliminary draft report Based on Presentation General Descriptive Report Technical Prescriptive report Final report

Areas of Management Auditing (MA Directives 2067) 1) Organization policy and behaviours 2) Organization structure 3) Work process and layout 4) Personnel management and records 5) Financial management and goods management 6) Service delivery and transparency 7) Use of information technology 8) Management of employee grievance 9) Miscellaneous

Methodology of Auditing (MA Directives 2067) 1) Observation 2) Discussion 3) Interview 4) Questionnaire 5) Document / evidence studies 6) Study and review of past reports 7) Other methods as deemed appropriate by audit team

Report Format (Prescribed by MA Directives 2067) 1) Management Audit Team 2) Introduction to the organization audited 3) Duration of auditing 4) Situations observed through management auditing, e.g., organization structure, work processes, etc 5) Completion/ Execution state of instructions / recommendations made in earlier report 6) Overall observation and opinions of audit team 7) Recommendations of audit team Annexes

ContdPrescribed Format for Management Auditing - Annexes Annex 4: Statement of approved and vacant positions of the organization Annex 5: Statement of transfer and placement of staff Annex 6: Staff sent for training during report period Annex 7: Statement of placement / transfer on Acting basis Annex 8: Statement of staff equivalent to those on Acting basis Annex 9: Staff not having placement Annex 10: Statement of Fazil staff Annex 11: Statement of staff on deputation Annex 12: Statement of advances and irregularities

Previous Mgmt Audit Report Formats Report on Upper Tamakoshi Hydro Project Report on Department of Customs Chapter I Background Auditing Objectives Audit Methodology Audit scope Limitation of auditing Report Structure Upper Tamakoshi Hydro Project Chapter I Background Objectives of management auditing Scope of auditing (as specified in Directives) Limitation of management auditing Methodology Report structure (chapter plan) ChpaterII: Observed subjects from during auditing Introduction to Custom Dept (history, objectives functions, legal provisions, etc.) Chapter II: Positive aspects: Reform aspects Suggestions (Coverage: Org policy and behaviours, org structure, work procedures and physical lay out, service delivery and transparency, personnel mgmt and records, financial and goods mgmt, etc. as stated in Directives) Chapter 3: Observed Situation during auditing Positive aspects Remarks Suggestions Chaper IV: Conclusions, with acknowledgement Chapter III Conclusions and recommendations

Others reports (e.g., Auditor Generals Performance Audit Report 2071) Coverage Situation of objective fulfilment Comparative review of targets and accomplishments Compliance to law, procedures and directives Physical infrastructure and utilization Information system and record mgmt. Manpower management Utilization of existing capacity Monitoring and evaluation system Situation of program execution Transparency and accountability Program execution Mobilization of financial resources Coordination situation Economy and timeliness in procurement Report format (Youth Self Employment Fund) Background of organization (Fund) Rationales for choosing the organization for perf. audit Policy provisions related to the Fund Objectives and targets Financial provisions Objectives of auditing Scope of auditing Auditing methodology Limitations of auditing Observed situation (Positive, Problems / challenges, areas of reform) Financial resource mobilization, budget, Grants, bank loan, investment, etc, with replies of organization) Manpower management (insurance, training, etc) Internal auditing Monitoring and evaluation Conclusion

Behavioral guidelines for writing a report Basic Rules: Concise, simplicity, clarity and describing Be clear why report is being prepared Be clear whom report is being written for How much time is available for writing What resource is needed for report writing Make the report precise and specific Make sentences short, avoiding complex sentences Present facts / findings with logical interpretation Make it reader-centred Giving visual impressions with attractive cover, page lay-out, pictures, diagram, binding

Other guidelines for style Other guidelines for style of Other Procedural Rules Avoid slang / jargons Use minimum quantitative terms / follow general rules when quantitative terms needed Try to explain / describe rather than giving opinion Avoid calculation / formula in the main text Use proper tense of expression Use abbreviations only after giving their full forms Select proper pronouns Third person preferable on many occasions Passive sentence preferable Use proper form of reference / follow rules of quoting, e.g., Ibid, op.cit, et.al. Avoid common grammatical mistakes / errors Proof reading / corrections (lastly) Take care of size / type of fonts for texts, captions / sub-captions Margins of report writing report writing Report writing is a skill; it is creative activity like weaving a carpet!

Indicators of good report writing Good start Adequate coverage with focus Rich content Relevancy of content Factual Logical sequence / flow Language Organization of report

Suggested Tentative Format for Field Studies on Mgmt Auditing Executive Summary Table of Content Abbreviations Chapter I: Introduction Background (Rationales for choosing organization for auditing) Objectives of auditing Scope of auditing Methodology of auditing Composition of auditing team Chapter II: Profiles of Organization Selected History, Objectives Functions Policy and legal provisions related to organization Targets and accomplishment Execution of previous directives, recommendations, investigation report, if any) Chapter III: Overall Observation of Situation (with coverage of but not limiting to 9-point scope stated in Directives) Positive Aspects Problems / challenges Areas of Reforms (Directives) Chapter IV: Conclusions and Major Recommendations Annexes References

Verbal Report Presentation (Two phases) Verbal Report Presentation (Two phases) Presentation planning Presentation execution:

Presentation: Preparation Presentation: Preparation Phase (Planning): Phase (Planning): Identify / consider the subject to be presented (what?) Set objective of the presentation (why?) Identify the audience characteristics (whom?) Find out the venue (where?) Formulate the content (listing the main points) and methods of presentation (how?) Collect relevant data / information to support your subject or points Prepare a reference note (a full text, if necessary) to be consulted / distributed Choose / prepare presentation materials Consider physical appearance (dress /hair, etc.) Cross-check the preparation Rehearse the presentation

Presentation: Implementation Phase (Actually Presenting) Reach the venue before time and make sure that everything is in place and fulfill all formalities (e.g., greeting) Highlight the main objectives and outline of your presentation Make presentation on a point-wise basis, elaborating each point (with a bang!) Keep observing feelings (verbal / non-verbal) of the audience Test understanding of the audience Manage your feelings (expressing / suppressing emotions anger, nervousness) Show respect to audience (building, supporting, avoiding disagreement, etc.) Summarize the main points and conclude the subject for meeting the objective