Internal Audit Quality Self-Assessment

WDA base all internal work plans and audit testing on a risk based approach. WDA have over 25 years of experience providing services to the Credit Union sector including Audit, Internal Audit, Risk and Compliance. WDA IAF staff have experience in conducting risk assessment of industrial and community credit unions ranging from €15m to €350m assets.

All quarterly reports issued to the board are accompanied by a response document. These formally capture the board’s consideration of the findings and response to all findings. WDA review all responses received and follow up on all material/ significant mitigation plans.

WDA IAF reports maintain a formal assessment of the effectiveness of the credit union’s risk management, internal control and governance processes.

o   objectives, scope and work undertaken;

o   An opinion on the effectiveness of the credit union’s risk management, internal control and governance processes;

o   Internal audit findings;

o   Recommendations, ranked by priority, with timelines for implementation, and progress on previously agreed action plans.

WDA have developed and tailored the reporting framework to adhere with all legislative requirements whilst maintaining concise and effective communication style. The reports are all issued in an RMP style and are regarded as being user-friendly and highly effective.

The WDA internal audit reporting framework has historically been well-received during CBI PRISM inspections. 

o   Boards should have an awareness and understanding of issues identified by IA.

o   Evidence of board discussion and challenge in relation to IA issues raised.

The IA function should make recommendations to boards on improving the effectiveness of the risk management, internal controls and governance processes

All reports issued to Board are accompanied by a response document that formalises the Board’s responses and requires direct engagement with the Board.

WDA have designed a suite of verification tests to gain sufficient assurance with the internal control environment.

Once WDA determined that the risk of internal control failure is sufficiently low the process of implementation of a thematic review cycle can commence.

WDA have designed and executed a detailed Internal Audit review of IT Infrastructure and Environment in credit unions. 

WDA have designed and executed a detailed Internal Audit review of AML/CTF in credit unions.

The WDA reporting framework includes a ‘Response Document’ which requires the Board to formally respond on all IAF findings and recommendations.

WDA have reported to Boards the requirement to document a formal appraisal of the IAF on an annual basis. WDA have received feedback resulting from these reviews in the past and incorporated improvements/ amendments to the process as a result.

Annual audit plan designed and discussed with management team including plans for each quarter’s theme. Themes selected on a risk based approach. WDA identify areas with potential control weaknesses and outline areas to be reviewed therein. Comprehensive work plan not reflected in the audit plan as the audit plan is initially set in Q4 of the preceding year and the detailed plan of works is considered when the lead auditor is scoping the areas of weakness in the upcoming quarter.

All findings in IAF report include details recommendations and expected timelines for remediation.

WDA have designed and implemented detailed thematic reviews of ‘IT’ Controls, Credit Underwriting and Credit Environment and Risk and Compliance functions. On all new IAF engagements WDA complete quarterly reviews of the bank and cash reconciliations until sufficient assurances have been sought regarding internal controls and the internal control environment. IAF will maintain testing on the bank and cash to ensure sufficient internal controls and financial controls are in place to mitigate the potential risk to error or fraud in the bank and cash reconciliations.

WDA have internal audit clients with multiple branch locations. Within the annual audit plan WDA included branch reviews and testing. The review included; visits on site in each branch location; testing of process and controls and interviews with branch staff.

WDA IAF maintain a review of all external reports and have reviewed the audit management letter in detail on an annual basis. These reviews are incorporated into the document review process in each quarter regardless of the theme.

o   Issues not appropriately ranked/prioritised

o   Lack of awareness at board level of issues identified by IA

o   Lack of review/response by the board of directors Lack of tracking of issues raised in IA Reports by boards and/or IA

WDA have modified and expanded the IAF reporting structure to ensure that all findings are laid out in the established ‘RMP’ format. This provides clarity on the issues/ expectations/ remediation and facilitates the Boards response to the findings. IAF are content that the reporting framework has been sufficiently developed to an acceptable standard and has repeatedly been positively appraised by PRISM inspectors.