...ensure efficiency and effectiveness of operations; 3) ensuring compliance with management directives; and 4) communicating the results to management and the audit committee through audit reports. Although all of these actions are important aspects of the internal audit function, the internal audit report is critical because it acts as a catalyst for change. Auditors communicate the results of the audit in their audit reports. To ensure accountability, the report must not be susceptible to misunderstanding.

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Unlike a financial statement audit report, the internal audit report presents a unique challenge because there is no standardized format. Each report is different in structure and content, depending on the nature and results of the assignment and the information that needs to be communicated, as well as to whom the results are being directed. To be effective, therefore, the report must communicate the findings in an accurate and concise form. The audit committee and management must be able to delineate and understand the risks and control deficiencies so that appropriate actions can be taken timely. Thus, the choice of words used and the tone of the audit report are as important as the information presented within it. To help ensure their reports are persuasive and bring positive results, internal auditors should keep them specific, meaningful, attainable, results oriented, and timely (SMART).

ATTRIBUTES OF SMART WRITING

Because the goal of the audit report is to ensure that the user can interpret audit results with accuracy and according to the intentions of the auditor, the report's tone and structure are paramount. The report should begin by aligning issues and recommendations with the International Standards for the Professional Practice of Internal Auditing (Standards) and end with results that are clearly written and presented timely. To ensure quality and accuracy, there are some basic guidelines or ground rules that should be considered when putting together an audit report using SMART writing.

SMART WRITING IS SPECIFIC The auditor should consider what specifically to communicate in the report, including the conditions, cause, effect, and "why" of each control issue and risk factor. Auditors should identify and address issues in a specific context rather than in broad or general terms. For example, stating that there is a control problem in the collection and processing of cash receipts is too broad. The report should identify the exact control issues and risk factors that need to be addressed, the nature of the findings, an analysis of the cause of the problems, the impact on operations, and the corrective action required....

NOTE: All illustrations and photos have been removed from this article.




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