Thread Options
#313237 - 02/07/05 04:09 PM Assigning a rating to audit findings
This2ShallPass87 Offline
New Poster
Joined: Feb 2004
Posts: 17
Maryland
This has probably been addressed in past post. I was just curious how other IA's assign a rating to audit findings. I am taking over the IA postion at our institution and the previous auditor only had two ratings: satisfactory(1-3 exceptions) and unsatisfactory(4+ exceptions). Any suggestions would be appreciated. Thanks

Return to Top
Audit
#313238 - 02/07/05 04:31 PM Re: Assigning a rating to audit findings
Andy_Z Offline
10K Club
Andy_Z
Joined: Oct 2000
Posts: 27,353
On the Net
There will always be a difference of opinion. First, it depends on the severity of the exception/violation. SARs not filed is worse than less than perfect descriptions of the SAR activity reported, but both may be criticized.

You may want to risk-rate them and then divide them. Sometimes I think just reporting the number of violations between risk categories (still subjective by bank) and denoting repeat problems is rating enough. What I wouldn't do is find something that sounds more negative than it is, nor that glosses over what is a real problem.
_________________________
AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

Return to Top
#313239 - 02/07/05 06:48 PM Re: Assigning a rating to audit findings
Tennismom Offline
Platinum Poster
Tennismom
Joined: Jan 2004
Posts: 764
There is a good thread entitled "Rating Internal Audit Reports" dated July 2004 in the Audit Forum that discusses the topic of rating reports, not findings. This may give you some direction.

Return to Top
#313240 - 02/07/05 07:23 PM Re: Assigning a rating to audit findings
Countess Kiwi Offline
Diamond Poster
Joined: Jun 2002
Posts: 1,815
Minnesota
Here is the link to the previous discussion. I would be happy to send you our worksheet if you PM me. Good luck with the ratings revision.
_________________________
Do what you can, with what you have, where you are.
~Theodore Roosevelt~

Return to Top
#313241 - 02/07/05 07:42 PM Re: Assigning a rating to audit findings
Anonymous
Unregistered

GRADING LEVELS

Actual Grades are based on Findings arrived at on a weighted basis.

Satisfactory

Level 1: No Major Findings, Minor Findings, Recommendations or Comments.

Level 2: One or two Minor Findings only, and any Recommendations or Comments.

Level 3: Three or more Minor Findings and any Recommendations and/or Comments.

Needs Improvement:

Level 4: One Major Finding and any Minor Findings, Recommendations or Comments

Level 5: Two or three Major Findings and any Minor Findings, Recommendations, or Comments.

Level 6: Four Major Findings and any Minor Findings, Recommendations or Comments.

Unsatisfactory

Level 7: Five or more Major Findings, Recommendations or Comments.

Level 8: Five or more Major Findings, Recommendations or Comments and numerous breaches of bank policy and/or compliance violations.

Level 9: Possible substantial loss of income.

Definitions:

Major Findings include violations of bank policy, improper accounting procedures, violations of internal control and security problems, violations of regulations, potential loss of income, extreme deviations from the expected error rate on sample testing, and wasteful use of assets.

Minor Findings include insignificant dollar variances, footing errors, typographical errors, and a small number of procedural errors in relation to the sample.

Recommendations cover something that, in the auditorís opinion, is still to be done and situations in which improvement in the operation is possible.

Comments cover situations that cannot be covered under Findings or Recommendations, including instances in which the Audit Division feels that management should be apprised of the situation, yet no bank policy or procedure has been violated or no Recommendations can yet be formulated. No recommendations are made in this category.

<Source> Warren, Gorham & Lamont - Bank Internal Auditing Manual (modified a little bit)

Return to Top
#313242 - 02/07/05 08:18 PM Re: Assigning a rating to audit findings
This2ShallPass87 Offline
New Poster
Joined: Feb 2004
Posts: 17
Maryland
Thanks for all of your suggestions and time.

Return to Top
#313243 - 02/08/05 06:24 PM Re: Assigning a rating to audit findings
Starter Offline
Platinum Poster
Starter
Joined: Aug 2004
Posts: 513
NJ
I have ratings for above Satisfactory - what if you audit an area or function and you find NO exceptions - are they graded Satisfactory? Of course not - throw an above average into the mix and give credit where credit is due!!!

Return to Top

Moderator:  Andy_Z