Auditing Business Processes

Early on in my auditing career at Deloitte, I learned a valuable lesson that has stuck with me ever since. It's a big reason why I became a successful CFO and consultant. Here it is: We never started audits by just checking the numbers.   Instead, we focused on the processes behind those numbers.  📌 Why?   Every number in a financial statement comes from a business process.   If that process is flawed, the numbers might be inaccurate—or worse, fraudulent.  Imagine I’m auditing a company with $20M in reported sales.   If I only match invoices to revenue, I’ve missed the bigger picture.  There are so many invoices I can vouch anyway I still won't see anything. Or I see what the invoices want me to see. Even if I did find something on a small sample, projecting it to the wider population always seems like a massive overreach ✔️ Instead, I ask:   🔹 How do they take and fulfill orders?   🔹 How do they bill customers?   🔹 What controls ensure accurate billing, collection and reporting?  📌 I walkthrough contracts, shipping documents, and bank statements to verify activity.  🚀 By focusing on the underlying process, I can:   ✅ Identify risk areas and gaps in controls.  (this then becomes the focus of the audit) ✅ Benchmark against industry best practices.   ✅ Help businesses increase revenue or reduce inefficiencies. Even though I’m no longer an auditor, this lesson still shapes how I advise businesses today.  My message here (particularly to SME Accountants): 👉 Don’t just record numbers.   Understand the "Why" and "How" behind them.  💡 Ask yourself: ✔️ Where does this data come from?   ✔️ How do our systems ensure the completeness and accuracy of the data?   ✔️ How can we reduce errors and improve decision-making?  When you optimize financial processes, you don’t just track business performance You improve it.  🚀 Step out of the ledger. Step into business impact.   📊 Your value isn’t just in recording numbers—it’s in improving the processes that create them.  Cheers, Ajibola 🔄 Tag a finance professional who needs this mindset shift!  

Dear AI Auditors, Auditing AI-Driven Business Processes AI now powers credit scoring, hiring, fraud detection, and customer support. But while it improves efficiency, it also introduces bias, data risks, and accountability gaps. Auditors must ensure these systems remain ethical, transparent, and secure. Here’s where to begin when auditing AI-driven processes. 📌 1. Understand the AI lifecycle Map the process from data collection to model monitoring. Bias often starts with poor data; governance gaps appear during deployment. Knowing each stage helps you identify control weaknesses early. 📌 2. Check data integrity Review data sources, accuracy, and labeling. Ask whether sensitive data is anonymized and whether sampling represents diverse users. Bad data leads to biased outcomes and audit findings. 📌 3. Evaluate governance and accountability Confirm ownership of AI oversight. Look for policies covering model approval, performance review, and retraining. If no one owns the process, risk grows unchecked. 📌 4. Test explainability and transparency Models should justify their decisions. If the organization cannot explain an AI outcome, that’s a compliance and reputational risk. 📌 5. Review privacy and security Audit encryption, access control, and data retention. Ensure APIs and model outputs are protected against tampering or reverse engineering. AI auditing isn’t about stopping innovation; it’s about making it trustworthy. Your job is to ensure models make fair, explainable, and compliant decisions. When you combine audit discipline with AI awareness, you protect both the organization and its credibility. #AIAudit #ITAudit #AIGovernance #RiskManagement #InternalAudit #DataEthics #Compliance #CybersecurityAudit #GRC #DigitalAssurance #CyberVerge #CyberYard

Taking you Behind the scenes of a full audit cycle. Audits are often seen as checklists and deadlines. But when you’re the only team member on an engagement, every phase becomes a masterclass in adaptability and learning. On my current engagement, I happen to be the only auditor, reporting directly to my manager. At first, it felt tricky starting a job entirely from scratch, but it pushed me to revisit the audit lifecycle so I could deliver with quality and confidence. Here’s a breakdown of the 5 core phases of an audit in practice: 1️⃣ Preliminary Phase Where the audit begins—due diligence, client onboarding, CEAC, client evaluation, and initial scoping. 2️⃣ Planning & Risk Assessment Performing procedures to identify risks and developing an audit response. This is an iterative process—as you gain new insights during the audit, you revisit and refine the initial risk assessment. 3️⃣ Interim Phase Testing controls to determine how much reliance can be placed on them. Weaknesses identified early influence how extensive later procedures must be. 4️⃣ Substantive Phase The “deep dive”—performing detailed testing of transactions, balances, and disclosures using both sampling and analytical review. 5️⃣ Completion & Final Phase Reviewing findings, addressing risks, and wrapping up before reporting. This culminates in the issuance of the audit opinion. 📖 ISA 300 (Planning an Audit of Financial Statements) also provides the framework that guides this process. This engagement has been both a challenge and a privilege. It taught me adaptability, sharpened my technical skills, and reminded me that every audit phase—no matter how routine it may seem—plays a vital role in building trust and credibility. Over the next few posts, I’ll be sharing practical steps I took at each stage—from the very first scheduling email to the final sign-off—to give a “behind the scenes” look at how an audit really unfolds.

🔍 What does AUDIT really mean? It’s not just about numbers or financial statements — it's a structured approach to enhancing governance, risk management, and internal controls. Let’s rethink AUDIT as a strategic function, broken down into five key pillars: A – Assess We evaluate processes, systems, and controls to identify gaps, inefficiencies, and emerging risks across all areas of the organization — not just finance. U – Understand Auditors need to understand the business, its operating environment, and the regulatory landscape. Without context, findings lack relevance. Deep understanding drives meaningful insights. D – Document We record our observations, analyses, and procedures to ensure transparency, accountability, and continuity. Good documentation builds credibility and supports future decision-making. I – Inspect We examine evidence, challenge assumptions, and test internal controls — all with a focus on safeguarding assets, improving efficiency, and supporting organizational objectives. T – Test Finally, we test the design and effectiveness of controls to ensure compliance, reduce risk, and confirm processes are working as intended. 🛡️ Internal audit is not just about finding problems — it’s about enabling improvement, building trust, and strengthening the foundation of the organization. Let’s view audit as a partner in progress, not a checkpoint. #InternalAudit #Governance #RiskManagement #Controls #AuditProfession #ContinuousImprovement #BusinessIntegrity #StrategicAudit #TrustThroughAudit

Let me bust a myth that's costing business owners real opportunities... Most people think audits are just about compliance - something you do because you "have to" or because you're a massive corporation. That's like saying a physical exam is only for sick people. Here's what an audit actually does for your business: 🔍 Gives you an independent, expert look at your operations - often uncovering inefficiencies you didn't even know existed 💪 Builds serious credibility with banks, investors, and partners. Audited financials open doors that stay closed otherwise ⚡ Strengthens your internal processes and controls, which saves you money and headaches down the road 📊 Provides verified data you can actually trust when making big strategic decisions 🚀 Shows stakeholders (including employees) that you run a professional, transparent operation I've seen mid-sized businesses discover cost-saving opportunities worth tens of thousands just from their audit process. One client found they were overpaying vendors by 15% across multiple categories. The real benefit isn't just the stamp of approval - it's the insights that help you grow smarter and stronger. Your audit shouldn't feel like a root canal. When done right, it's more like having a business coach with a magnifying glass. What's the biggest misconception you had about audits before you really understood what they do?

The 7-Step Audit Process (Detailed) A structured audit ensures accuracy, compliance, transparency, and trust within an organization. It provides assurance that financial, operational, and regulatory processes are functioning as intended. 1️⃣ Planning – Set Objectives & Identify Risks ▫️Purpose: To establish the foundation of the audit. ▫️Key Activities: Define the scope, objectives, and type of audit (financial, compliance, operational, etc.). Identify key risks and areas of concern. Develop a comprehensive audit plan, including timelines and resource allocation. Review past audits and organizational policies. ▫️Outcome: A clear and approved audit plan. 2️⃣ Risk Assessment – Evaluate Controls ▫️Purpose: To understand and evaluate the internal control environment. ▫️Key Activities: Identify potential risk areas (financial misstatements, process inefficiencies, compliance gaps). Evaluate existing control systems and their effectiveness. Prioritize high-risk areas for detailed testing. ▫️Outcome: A risk-based audit approach focusing on critical processes. 3️⃣ Substantive Testing – Verify Records ▫️Purpose: To gather evidence supporting the accuracy of financial and operational data. ▫️Key Activities: Perform test of details (checking invoices, receipts, and documents). Conduct analytical procedures (comparing data trends, ratios, and variances). Verify transactions, balances, and entries. ▫️Outcome: Verified and reliable audit evidence. 4️⃣ Analysis – Investigate Variances ▫️Purpose: To analyze results and identify discrepancies or inconsistencies. ▫️Key Activities: Compare actual results with budgets, standards, or prior periods. Investigate unusual trends or deviations. Identify the root cause of errors or inefficiencies. ▫️Outcome: Insight into operational weaknesses and areas for improvement. 5️⃣ Review – Validate Findings ▫️Purpose: To ensure that audit evidence supports conclusions. ▫️Key Activities: Reassess findings for accuracy and completeness. Conduct peer reviews or managerial reviews for validation. Prepare a summary of key observations and recommendations. ▫️Outcome: A validated and quality-checked audit result. 6️⃣ Reporting – Communicate Results ▫️Purpose: To present audit findings clearly to management and stakeholders. ▫️Key Activities: Draft the audit report, including findings, risks, and recommendations. Highlight areas of non-compliance, inefficiency, or control weakness. Suggest corrective actions and assign responsibilities. ▫️Outcome: A professional audit report that drives organizational improvement. 7️⃣ Completion – Follow Up on Actions ▫️Purpose: To ensure corrective measures are implemented effectively. ✅ Benefits of a Well-Executed Audit Promotes accountability and transparency. Enhances operational efficiency. Reduces fraud, error, and compliance risks. Strengthens governance and decision-making. Builds stakeholder confidence.

🔎 The Audit Process: Step by Step The audit process is a structured and cyclical approach that helps evaluate and improve an organization’s operations, internal controls, and compliance. Here’s a simplified breakdown: 1️⃣ Letter of Understanding The process starts with an agreement between the auditor and the auditee. This document explains the purpose, scope, responsibilities, and key expectations of the audit. 2️⃣ Entry Meeting Auditors meet with management to present the audit plan, objectives, and timeline. It’s also a chance to answer questions and set up open communication. 3️⃣ Audit Queries & Feedback During fieldwork, auditors review documents, interview staff, and test internal controls. They raise questions and get feedback to confirm and validate their findings. 4️⃣ Exit Meeting Once fieldwork is done, auditors share their initial findings with management. This discussion ensures accuracy and builds a common understanding before the report is written. 5️⃣ Management Letter Sometimes, auditors issue a separate letter highlighting smaller issues or weaknesses that may not appear in the main report but still need management’s attention. 6️⃣ Draft Audit Report Auditors prepare a draft report covering the objectives, scope, key findings, and recommendations for improvement. 7️⃣ Final Audit Report After reviewing management’s feedback and action plans, the draft is finalized. The final report includes findings, recommendations, and management’s official responses. 8️⃣ Public Hearings In some public sector audits, the report is presented in hearings or to oversight bodies to promote transparency and accountability. 9️⃣ Follow-up & Implementation Finally, auditors check if management has carried out the recommended actions. Follow-up reviews confirm that improvements are effective and issues are resolved. #AuditProcess #InternalAudit #AuditLifecycle #RiskManagement #Governance #Compliance #Controls #BusinessImprovement #CorporateGovernance #ContinuousImprovement #Transparency #Accountability #Finance #ProfessionalServices #AuditInsights

Audit or assurance process walkthroughs with core team members are essential because they: 1. Promote Understanding: Walkthroughs ensure that auditors and assurance teams fully understand the process from those who know it best. Core team members can explain intricate details, variations, and operational nuances that might not be documented. 2. Validate Process Accuracy: Direct discussions help verify that documented processes align with real-world practices. This minimizes gaps between what's on paper and actual execution, enhancing the audit's relevance. 3. Identify Potential Risks and Controls: Core team members can provide insights into areas where risks arise and how controls are applied. This helps in assessing the effectiveness of controls, identifying gaps, and finding areas for improvement. 4. Foster Collaboration: Involving core team members promotes transparency and collaboration. It builds a sense of joint accountability for process improvements and highlights the importance of control ownership across teams. 5. Highlight Best Practices and Areas for Improvement: Walkthroughs often reveal not only gaps but also strong practices within the team. These can be acknowledged, shared, and scaled across other processes or departments for broader benefits. Regular walkthroughs are therefore valuable, both for enhancing audit quality and building a culture of continuous improvement and compliance across the organization. Anup Singh, CISA® #Audit #Assurance #ProcessImprovement #RiskManagement #ControlEffectiveness #Collaboration #InternalAudit #Compliance #ProcessWalkthrough #Linkedin #ContinuousImprovement #BestPractices #OperationalExcellence LinkedIn LinkedIn for Learning LinkedIn Guide to Creating

You walk into work, and your inbox is flooded with urgent audit requests from regulators. Your company is being audited for compliance with ISO 27001, SOC 2, or GDPR, and leadership is looking to you to lead the response. How would you handle this situation? 1. Assess What’s Being Audited • Is this a scheduled audit or a surprise regulatory review? • What specific compliance requirements are in focus? (e.g., access controls, data protection, vendor risk). 2. Gather the Right People & Documentation • Who needs to be involved? IT, Legal, Compliance, Risk, HR? • Where’s the evidence? Are your security policies, access logs, risk assessments, and training records up-to-date? 3. Identify Gaps & Risks • Did the company miss a control requirement? • Are there unresolved security incidents or missing policies that could create audit findings? 4. Engage with the Auditors Effectively • Stick to what’s asked—don’t overshare! • Be prepared to explain policies and provide proof (e.g., pen testing reports, risk assessments, vendor agreements). 5. Develop an Action Plan • If there are gaps, what’s the corrective action plan? • Who’s responsible for ensuring the company remains compliant moving forward? If you were leading this audit response, what’s the first thing you’d do? Would you prioritize gathering documentation, identifying compliance gaps, or managing the audit conversations?