rusty reviewers â savvy ways to reâengineer your peer
2017 ALGA Annual Conference CS#21. Rusty Reviewers – Savvy Ways to Re-engineer Your Peer Review Approach
RUSTY REVIEWERS – SAVVY WAYS TO RE‐ENGINEER YOUR PEER REVIEW APPROACH Martin Petherbridge Paula Ward ALGA Annual Conference , Atlanta GA May 23, 2017
REFRESH MY MEMORY…..!
TYPICAL RED AND YELLOW BOOK DEFICIENCIES
RECENT PROCESS CHANGES
LEADING THE REVIEW…….SOFT SKILLS
2
2017 ALGA Annual Conference CS#21. Rusty Reviewers – Savvy Ways to Re-engineer Your Peer Review Approach
IT’S REQUIRED! GOVERNMENT AUDITING STANDARDS (YELLOW BOOK) INSTITUTE OF INTERNAL AUDITORS (RED BOOK)
A peer review should determine whether, for the period under review, an audit organization’s internal quality control system was adequate and whether quality control policies and procedures were being complied with to provide the audit organization with reasonable assurance of conforming with professional standards. ALGA’s peer review program is intended to help member organizations in their efforts to meet professional standards. Source: External Quality Control Review, ALGA 3
REFRESH MY MEMORY, PLEASE! Issues of non‐compliance with audit standards must be rated Peer Review Ratings: MATTERS, FINDINGS, DEFICIENCIES…
4
2017 ALGA Annual Conference CS#21. Rusty Reviewers – Savvy Ways to Re-engineer Your Peer Review Approach
REFRESH MY MEMORY, PLEASE! Peer Review Ratings: MATTER ‐ a circumstance identified by the peer reviewer that warrants further consideration Communication ‐ Verbal Comment 5
REFRESH MY MEMORY, PLEASE! Peer Review Ratings: FINDING – one or more MATTERS that result from a condition such that there is more than a remote possibility that the reviewed organization would not perform in conformity with professional standards Communication – Management Letter 6
2017 ALGA Annual Conference CS#21. Rusty Reviewers – Savvy Ways to Re-engineer Your Peer Review Approach
REFRESH MY MEMORY, PLEASE! Peer Review Ratings: DEFICIENCY – one or more FINDINGS that could create a situation where the organization would not have reasonable assurance of performing / reporting in conformity with professional standards.
Communication – Opinion Letter / Compliance Report 7
REFRESH MY MEMORY, PLEASE! COMPLIANCE TO RED BOOK, YELLOW BOOK, OR ORANGE (RED AND YELLOW) RED
• CONFORMS • PARTIALLY CONFORMS • DOES NOT CONFORM YELLOW • PASS • PASS WITH DEFICIENCIES • FAIL
8
2017 ALGA Annual Conference CS#21. Rusty Reviewers – Savvy Ways to Re-engineer Your Peer Review Approach
WHAT RECENT PEER REVIEWS UNCOVERED 2015 – DEFICIENCIES ‐ TOP 10 YELLOW BOOK 1
Non‐audit Services
2
Monitoring of Quality
3
Overall Assessment of Evidence
4
Planning
5
Audit Documentation
6
Stating Compliance with GAGAS
7
Assessing Sufficiency and Appropriateness
8
Documentation of Independence
9
Continuing Professional Education
10
Conceptual Framework for Independence
9
WHAT RECENT PEER REVIEWS UNCOVERED: 2015 – DEFICIENCIES ‐ TOP 10 RED BOOK 1
Quality Assurance and Improvement Program
2
Criteria for Communicating
3
Internal Assessments
4
Policies and Procedures
5
Purpose, Authority, and Responsibility
6 7
Engagement Objectives Engagement Work Program
8
Independence and Objectivity
9
Definition of Internal Auditing, the Code of Ethics, and the Standards in the Internal Audit Charter
10
Engagement Planning
10
2017 ALGA Annual Conference CS#21. Rusty Reviewers – Savvy Ways to Re-engineer Your Peer Review Approach
RECENT PEER REVIEW PROCESS CHANGES 1. QCS Review (Yellow and Red) Out with the Old…Team Leader completed QCS on site In with the New…All team members complete QCS review, discuss conclusions on a conference call, also get CPE…
2. Summary of Exceptions ‐ Yellow Book (2014) Out with the Old…Old form resulted in inconsistencies between peer review teams
In with the New…More consistency (less passes with deficiencies, more clean opinions without management letters, more verbal comments) 11
RECENT PEER REVIEW PROCESS CHANGES 3. Communications with Audit Shop Out with the Old… Meet with audit shop at entrance and exit conferences
In with the New…Communicate with audit shop EVERY DAY….no
surprises
4. Team Member Development Out with the Old…No thought to developing leaders In with the New…Explain roles and tasks during review, how they fit into bigger picture
12
2017 ALGA Annual Conference CS#21. Rusty Reviewers – Savvy Ways to Re-engineer Your Peer Review Approach
LEADING A PEER REVIEW TEAM Team Leader objectives: • Oversee completion of all peer review tasks • Finish on schedule • Make it a positive experience for all • Develop team members ….into future team leaders
13
LEADING A PEER REVIEW TEAM As a team leader, be mindful of : • Environment – new location, time zone, audit shop • Needs of team members – volunteers, experience, commitments
Collaborate, share stories, eat good food!
Work crazy hours
14
2017 ALGA Annual Conference CS#21. Rusty Reviewers – Savvy Ways to Re-engineer Your Peer Review Approach
WHAT IMPROVEMENTS WOULD YOU RECOMMEND TO THE PEER REVIEW PROCESS?
15
RUSTY REVIEWERS – SAVVY WAYS TO RE‐ENGINEER YOUR PEER REVIEW APPROACH Martin Petherbridge Paula Ward ALGA Annual Conference , Atlanta GA May 23, 2017
REFRESH MY MEMORY…..!
TYPICAL RED AND YELLOW BOOK DEFICIENCIES
RECENT PROCESS CHANGES
LEADING THE REVIEW…….SOFT SKILLS
2
2017 ALGA Annual Conference CS#21. Rusty Reviewers – Savvy Ways to Re-engineer Your Peer Review Approach
IT’S REQUIRED! GOVERNMENT AUDITING STANDARDS (YELLOW BOOK) INSTITUTE OF INTERNAL AUDITORS (RED BOOK)
A peer review should determine whether, for the period under review, an audit organization’s internal quality control system was adequate and whether quality control policies and procedures were being complied with to provide the audit organization with reasonable assurance of conforming with professional standards. ALGA’s peer review program is intended to help member organizations in their efforts to meet professional standards. Source: External Quality Control Review, ALGA 3
REFRESH MY MEMORY, PLEASE! Issues of non‐compliance with audit standards must be rated Peer Review Ratings: MATTERS, FINDINGS, DEFICIENCIES…
4
2017 ALGA Annual Conference CS#21. Rusty Reviewers – Savvy Ways to Re-engineer Your Peer Review Approach
REFRESH MY MEMORY, PLEASE! Peer Review Ratings: MATTER ‐ a circumstance identified by the peer reviewer that warrants further consideration Communication ‐ Verbal Comment 5
REFRESH MY MEMORY, PLEASE! Peer Review Ratings: FINDING – one or more MATTERS that result from a condition such that there is more than a remote possibility that the reviewed organization would not perform in conformity with professional standards Communication – Management Letter 6
2017 ALGA Annual Conference CS#21. Rusty Reviewers – Savvy Ways to Re-engineer Your Peer Review Approach
REFRESH MY MEMORY, PLEASE! Peer Review Ratings: DEFICIENCY – one or more FINDINGS that could create a situation where the organization would not have reasonable assurance of performing / reporting in conformity with professional standards.
Communication – Opinion Letter / Compliance Report 7
REFRESH MY MEMORY, PLEASE! COMPLIANCE TO RED BOOK, YELLOW BOOK, OR ORANGE (RED AND YELLOW) RED
• CONFORMS • PARTIALLY CONFORMS • DOES NOT CONFORM YELLOW • PASS • PASS WITH DEFICIENCIES • FAIL
8
2017 ALGA Annual Conference CS#21. Rusty Reviewers – Savvy Ways to Re-engineer Your Peer Review Approach
WHAT RECENT PEER REVIEWS UNCOVERED 2015 – DEFICIENCIES ‐ TOP 10 YELLOW BOOK 1
Non‐audit Services
2
Monitoring of Quality
3
Overall Assessment of Evidence
4
Planning
5
Audit Documentation
6
Stating Compliance with GAGAS
7
Assessing Sufficiency and Appropriateness
8
Documentation of Independence
9
Continuing Professional Education
10
Conceptual Framework for Independence
9
WHAT RECENT PEER REVIEWS UNCOVERED: 2015 – DEFICIENCIES ‐ TOP 10 RED BOOK 1
Quality Assurance and Improvement Program
2
Criteria for Communicating
3
Internal Assessments
4
Policies and Procedures
5
Purpose, Authority, and Responsibility
6 7
Engagement Objectives Engagement Work Program
8
Independence and Objectivity
9
Definition of Internal Auditing, the Code of Ethics, and the Standards in the Internal Audit Charter
10
Engagement Planning
10
2017 ALGA Annual Conference CS#21. Rusty Reviewers – Savvy Ways to Re-engineer Your Peer Review Approach
RECENT PEER REVIEW PROCESS CHANGES 1. QCS Review (Yellow and Red) Out with the Old…Team Leader completed QCS on site In with the New…All team members complete QCS review, discuss conclusions on a conference call, also get CPE…
2. Summary of Exceptions ‐ Yellow Book (2014) Out with the Old…Old form resulted in inconsistencies between peer review teams
In with the New…More consistency (less passes with deficiencies, more clean opinions without management letters, more verbal comments) 11
RECENT PEER REVIEW PROCESS CHANGES 3. Communications with Audit Shop Out with the Old… Meet with audit shop at entrance and exit conferences
In with the New…Communicate with audit shop EVERY DAY….no
surprises
4. Team Member Development Out with the Old…No thought to developing leaders In with the New…Explain roles and tasks during review, how they fit into bigger picture
12
2017 ALGA Annual Conference CS#21. Rusty Reviewers – Savvy Ways to Re-engineer Your Peer Review Approach
LEADING A PEER REVIEW TEAM Team Leader objectives: • Oversee completion of all peer review tasks • Finish on schedule • Make it a positive experience for all • Develop team members ….into future team leaders
13
LEADING A PEER REVIEW TEAM As a team leader, be mindful of : • Environment – new location, time zone, audit shop • Needs of team members – volunteers, experience, commitments
Collaborate, share stories, eat good food!
Work crazy hours
14
2017 ALGA Annual Conference CS#21. Rusty Reviewers – Savvy Ways to Re-engineer Your Peer Review Approach
WHAT IMPROVEMENTS WOULD YOU RECOMMEND TO THE PEER REVIEW PROCESS?
15
