In the planning phase of an internal audit, conducting background research is a crucial procedure. This research offers insights into the audit unit’s objectives, control environment, and aids in risk assessment. It highlights potential control weaknesses, fraud risks, unusual trends, key performance indicators, regulatory compliance requirements, management expectations, and an overview of the audit unit’s processes. Completing thorough background research streamlines the planning process, offering clear guidance for setting engagement objectives and making scoping decisions to prevent scope creep. A tool for Background research is the Artifact Control Matrix (ACM) in internal audit.
An example of Artifact Control Matrix is attached. The artifacts listed here are only indicative and for understanding purposes.