The Accountant Sep-Oct 2016√(2)

BUSINESS Practice and development
Post audits have also, in a well working
environment with systems and support
from the management, made the work
of external auditors easier as they place
reliance on the work done by internal
auditors.
We should understand that currently
risk management is the order of the day
as much as some Senior Management
staff still believe that pre- audit should
be conducted by audit staff other than
accounts supervisors or examiners. It
may sound true to them but to me as an
upcoming internal auditor, I think during
post audit, emphasis should be placed on
review of controls weaknesses and how it
can be improved to prevent future breach
of controls.
It’s the role of management to ensure the
controls governing management of funds
are effective to enable the achievement
of company’s business objective, enable
reliable financial reporting on its operation,
ensure there is no misappropriation of its
assets and minimize cost of capital. Post
audit exercises are crucial in preventing
debilitating misstatements in a company’s
records and reports.
With the inception of county
governments where the structures are not
yet ripe and the role of internal audit has not
been embraced fully, it’s ideal to understand
that when post audit is done, it enables the
initiation of new control measures that are
key to growth and prosperity based on the
auditor’s recommendations; e.g. assume an
auditor recommends the use of automated
system for revenue collection due to
the risks posed by manual system after
undertaking a post- audit of records posted.
It’s definitely good if you work as per the
recommendations because the benefits are
long term and minimize risk.
The importance of post audit exercises
should be embraced even in capital
budgeting decisions. Remember that
with the new era of digital world- like
use of Integrated financial management
information system ( IFMIS), Government
pay, IPPD,RTGS and electronic pay,
their validity and authenticity in terms
of transactions, can only be established
through post- audit exercises where errors
and omissions to include fraud can be noted
and taken to management for response.
During post- audit exercise, an auditor
is not an examiner nor a monitoring
and evaluation officer nor a government
inspectorate but an adviser whose main
intention is not to handcuff you but to
save you from being handcuffed incase of
extremes. Hence, we need to remember that
when an auditor sends recommendations
and gives timelines, they should never be
ignored as all the recommendations are
meant for your safety and the safety of the
During postaudit
exercise, an
auditor is not an
examiner nor a
monitoring and
evaluation officer
nor a government
inspectorate but an
adviser whose main
intention is not to
handcuff you but to
save you from being
handcuffed incase
of extremes.
organization in terms of prosperity.
It’s also through post audit that an
auditor is able to advice on the risk level
and its effects both in the short and long
term by suggesting some recommendations
to mitigate the risk as the auditor is able to
perform a wide coverage using substantive
test and analytical procedures. In addition,
in post audit, the issue of effective and
efficient utilization of a company’s
resources will also be highlighted as the
auditors through their advisory framework
may advise on the same.
Dezoort, Harrison, and Taylor (2006),
predict that post audit-reviews increase
accountability via feedback pressure.
Feedback pressure occurs when an auditor
recommends in the following form; the
amount of Kshs.XYZ be fully accounted
for by employee ABC or department xxx.
This will create pressure to the employee to
meet the same but is a healthy one for both
organization and employee.
In case of capital investment decisions,
post-audit reviews will help to ensure that
anticipated benefits are eventually obtained
and also ensure capital spending does not
exceed the amount authorized. This is
actually applicable to County governments
and National government on development
expenditures.
Post audit review is also a provider of
great information to use on future project
engagements and is more of an evaluation of
project’s goals and activity achievement as
measured against the project plan, budget,
time deadlines, and quality of deliverables,
specification and client satisfaction.
In case of projects audit, post- audit
will do more than pre-audit; in that it
will help the auditor, audit committee and
management to understand the following
key questions;
1. Was the project goal achieved? Given
that in public sector in case of request
for money it must be accompanied by an
objective mostly trainings, construction
works etc.
2. Was the project work done on
time, within budget, and according to
specifications? This mainly applies to
procurement works through a peruse of the
BQs( Bill of Quantities) where I believe
as an auditor the BQ should just be a
benchmark as the contractor needs to do
more than what is in the BQ.
3. Was the client satisfied with project
results? This can be looked upon based on
the call for corporate social responsibility
(CSR).
4. Was the business value realized?
5. What worked well and what did not
work well?
Post audits also help the auditors to
inform the management on the status of
their assets and liabilities mostly when
performing quarterly or yearly audits.
In conclusion, I can say the shift to
post- audit is not a drop in the ocean and
for auditors this is the best move we should
embrace. It may sound challenging and
tricky at the moment but in the long run
we would sing auditors’ hymn appreciating
the improvements done due to our
recommendations. We will feel relaxed,
appreciative and motivated to do more
when we perform a Post-audit, recommend
and have our recommendations acted upon
by management for a better tomorrow and
for the future prosperity of our nation. Let’s
together embrace the change as auditors as
our children will be happy too when they
become future managers.
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