INTERNAL AUDIT

CHAPTER 6: REPORTING PHASE

By:
Utari Nurfajri Arifa (120110100074)
Archella Syifa Sagala (120110100082)




Fakultas Ekonomi dan Bisnis
Universitas Padjadjaran
2013
Reporting Phase in Internal Auditing

In order to make the report successful, it must persuade management to follow its
recommendations and the report can be classified as a good reporting if it follows these
characteristics:
Significance to justify reporting matter to management.
Usefulness and timeliness to meet the interests and needs of management in a
timely manner for appropriate action to be taken.
Accuracy and adequacy of support no errors of act, logic, or reasoning.
Convincingness review findings presented in a convincing manner, and related
conclusions and recommendations follow logically from the facts presented.
Objectivity and perspective presented in an objective unbiased manner.
Clarity and simplicity clear and simple as possible.
Conciseness no longer than necessary to communicate required information.
Constructiveness of tone to encourage favorable reaction to review findings
and recommendations. Emphasize needed improvements rather than criticisms.
Organization and positivity
It also can be assured that good reporting can make good result. The good reporting must
be presented in clearer, more easily understood language so that the reader understands
what is wrong and what needs to be done.

For the review team to produce more effective reports, it sometimes helps to think in terms
of the ABCs (Accuracy, Brevity, Confidence, Defense, Explain, Format) of effective report
writing.
Accuracy
The reviewers should be accurate in presenting facts, spelling, punctuation,
grammar, and usage. Accurate description of problems, conditions, and situations is
an absolute necessity. If management is to rely on the information given by the
review team, it must be accurate in all respects. The reviewers cannot shade the
facts or manipulate them to their unfair advantage. If they do, they shake
managements faith in their reporting.
Brevity
The reviewers should strive for brevity, using the short, concrete word and the
short, simple sentence. Their report should be exactly the right lengthlong enough
to cover the subject, short enough to be interesting. Lengthy narratives and long
paragraphs are to be avoided; listings and tabulations should be used instead.
Confidence
The reviewers should be confident that they have something of value to say. If they
areand this is basic to an effective reportthen they must say it confidently,
positively, and sincerely, as well as simply and directly.
Defense
As the saying goes, there are two sides to every story, so the reviewers should be
sure to present managements defense and reaction to their findings and
recommendations. Failure to present management reactions detracts from the value
of the report to management and wastes time. Management may agree with the
review teams findings and conclusions in whole or in part, or may totally disagree.
Explain
The reviewers must explain, interpret, and describe, since many times facts have to
be interpreted for management. Tabulations, charts, and graphs may present the
overall picture, but the reviewers have to tell management what the facts mean.
Format
In presenting the review report, there is the conflict between formatting it in free
style, based on the creativity of the reviewers, or using a strict formula in which the
reviewers fill in the spaces. A recommended middle ground is to define some basic
directions, but to avoid strict standardization.

The reporting review consists of:
Introduction
Background
Scope of Review
Objective
Approach
Reporting
Summary of Findings and Recommendations

There are four types of operational report review:
Formal
Non-formal
Oral
Written