Five Elements of Audit Reporting
At the end of the auditing process, internal auditors summarize their findings through a project status reports for internal audit projects. Aside from the findings, the report also includes recommendations and management action plans to be undertaken in order for the problems to be resolved. It should also contain the five elements of audit reporting which is also called the "5 Cs". Included in the five elements are following:
Condition -- Refers to the problems and deficiencies identified within the organization.
Criteria -- Pertains to the organization's standard that was violated or not properly observed.
Cause -- Contains the reasons and the contributing factors to the identified problems.
Consequence -- This includes the impact of the negative findings in the auditing process.
Corrective Actions -- This is the corrective measures that the organization should undertake and have to be agreed upon by the management.
It is important for the project status reports for internal audit projects to have proper recommendations since this will help the organization in achieving their goals to improve the areas with identified deficiencies. While internal auditors don't have control of the organization's problems and solutions, their report provides assurance to the audit committee, the management, stakeholders, regulators, employees and organization's financiers that the internal control are in place and working the way it should be. Recommendations will help the entity to function better and eliminates operational flaws as possible.