When auditing your management system, evaluating the finance department can help uncover any overlooks, misprints, or frauds. Let us talk about the ISO audit checklist for finance department.
What is an ISO Audit, and Why is it Important?
To understand the importance of an ISO audit, let us have a glance at the ISO certification process. Whenever a company attempts to acquire an ISO certificate, they have to select an accredited certification body that will conduct an audit of the management system. This audit is known as a certification audit. During this certification audit, the lead auditor will audit every department and process of your organisation if it interacts with the management system to determine its compliance with the recommendations of ISO standards.
Such audits are gruelling but highly advantageous for the organisation as it helps to uncover non-conformances. Non-conformances are discrepancies between your current practice and the one outlined in the chosen ISO standard. However, the actual benefit of this audit is that it also highlights areas that are not problematic at present but have the potential to develop into an issue in the future.
Lastly, an audit is also beneficial as it evaluates and emphasises growth opportunities that may be invisible to the organisation, its managers or the employees. Hence, ISO audits, such as ISO 9001 audit, are essential for the growth and efficiency of your management system.
What Happens in an Internal Audit?
Let us begin by clarifying that an internal audit differs from a certification audit. An internal audit takes place by the organisation itself, either on its own or with the help of an ISO consultant. The purpose of the audit, like ISO 45001 audit, is to prepare the management system for the certification audit.
This means that the in-house auditor will not only check for non-conformances but also prepare the employees for the upcoming external audit by giving them practice interview questions. Think of an internal audit like a final mock drill or a dress rehearsal before the final stage performance.
How Do You Audit a Financial Department?
Generally, the information audited in the finance department includes the year in the trial balance, lease agreements, accounting policies, procedure manual, personnel manual and fiscal year budget. Since we are talking about an ISO audit, compliance will also be tested.
What is an ISO Audit Checklist?
An ISO audit checklist, such as an ISO audit checklist for finance department, is a self-assessment questionnaire utilised to ensure that all the necessary steps for completing the process are appropriately conducted. In other words, it is a roadmap that can be used to ensure that the auditors, especially the in-house auditors, are hitting every milestone and not missing any essential step.
ISO Audit Checklist for Finance Department
The ISO audit checklist for the finance department contains many pertinent questions, including:
- Testing the general ledger.
- Evaluating year-end trial balance and finance statements to ensure that they are broken down by net asset class.
- Helping to evaluate the schedule of federal awards so that federal awarding agencies, grant numbers, pass through an agency, program number, award amount, current year expenses, and prior year expenses can be tested.
- Evaluating grant agreements for those grants that have expired or are currently expiring.
- Checking the list of the board of directors for the specific fiscal year.
- Checking the list of audit committee members and, if applicable, checking the oversight board for the audit.
- Evaluating minutes of the meetings of the board of directors and communities, going on to assess summary of any board actions that might affect the designated or end designated fund balances.
- Going through the personnel manual.
- Ensuring that the accounting policies and procedures manual are in alignment.
- Checking the lease agreements.
- Going through the year-end payroll tax reports issued during the calendar year.
- Going through the fiscal year budget.
- Evaluating the detailed list of donations of goods and services, including the number of donated services or hours on such services.
- Evaluating the details of legal fees paid, checking the name and address of all attorneys hired throughout the year.
- Going through the details of the repair and maintenance account to ensure that there is no gap.
- Checking all paid bills, bank statements and grant reports for the year.
- Evaluating the year-end bank reconciliation and bank statements.
- Assessing bank reconciliation, checking if a complete list of outstanding cheques with cheque number, date and amount are available.
- Assessing details of all deposits in transit and checking their listing in a chronological order.
- Going through the year-end investment summary to highlight year-to-debt transactions and finding the balance of investments held at year-end to determine the Fair Market Value (FMV) and original cost.
- Going through the documentation of donation of market securities.
- Checking the list of unconditional promises given or any underlying documentation.
- Assessing the list of year-end accounts payable and accrued expenses.
Edara Systems will Guide Organisations in ISO Audit for Finance Department Process
Utilising the ISO audit checklist for finance department helps to simplify the auditing process and augment its efficiency. If you need help through auditing for the finance department process, Edara Systems is here. To contact Edara Systems consultants, all you need to do is visit edarasystems.com or call +61 2 8091 5777.
Expert consultants in Edara Systems will guide organisations step by step to the final stage of ISO auditing process, and also will help them obtain different types of ISO certification.
