Audit Cycle

Approved by the President on February 1, 2001

The major steps of the audit cycle adopted by the Internal Audit Office of the Lebanese American University are presented hereafter.

The steps are listed in the chronological order of their occurrence.

I. Risk Assessment ¹

May be done as part of a periodic audit plan or at the level of an individual area.

II. Background Information

Internal Audit consults "Audit Permanent File," conducts preliminary interviews, obtains policies and procedures, and collects data and other information that shed light on the area to be audited.

III. Audit Program

Internal Audit sets audit objectives and scope and formulates audit steps.

IV. Notification to Start ²

• Internal Audit sends a notice to the auditee informing him or her that an audit is planned.
• The audit program is usually attached to the “Notification to Start.”
• The auditee is asked to review it and provide feedback and input during the Entrance Meeting.

V. Entrance Meeting

• Internal Audit holds a meeting with the auditee to discuss the audit objectives, scope, and steps.
• Audit program clarified and input obtained from auditee. ³
• Preliminary audit schedule is agreed to.

VI. Start of Fieldwork

Internal Audit staff conduct tests and audit work.

VII. Progress Reports / Meetings

Internal Audit keeps the auditee abreast of the progress of the audit.

VIII. End of Fieldwork

Internal Audit notifies auditee of conclusion of audit work.

IX. Draft Audit Report

Internal Audit issues the "Draft Audit Report" to the auditee(s) as appropriate. Such a report would usually include: Preamble, Objectives, Scope, Methodology, Findings, and Recommendations for Discussion.

X. Exit Meeting

Internal Audit holds the Exit Meeting (usually within 15 calendar days from date of issuing the draft report) to clarify findings and explain recommendations, if need be, and to obtain Management Response(s) to the Internal Audit Recommendations.

XI. Management Response(s)

Auditee provides Management Response(s) during or shortly after the Exit Meeting.

XII. Final Audit Report

Internal Audit issues the Final Audit Report to the auditee within 5 calendar days of receiving the Management Response(s), with appropriate copies to the concerned Vice President, the Vice President for Finance and Administration, the President, the members of the Audit Committee (and subsequently to the Board), and to the External Auditors.

XIII. Subsequent Events Review

Internal Audit conducts subsequent events review to follow up and report on the implementation of the agreed to recommendations.

XIV. General Provision

The above are internal guidelines that are meant to brief auditees with the audit cycle.

The guidelines shall not limit the activities of Internal Audit or restrict alterations to such cycle, as may be deemed appropriate under the circumstances.

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1. It may be skipped if audit is requested by the President and/or the Audit Committee.

2. It shall be made simultaneously with the start of fieldwork in case of a surprise audit job, e.g. surprise cash count.

3. Audit program may be revised accordingly.