Considering Post-Audit Appraisals: Is It Worth It and How Should We Start?

Dear Friends,

Working with a Chartered Accountant Firm, we conduct various kinds of audits for corporations. Audits may vary in duration from one day to three to four months. Therefore, we are planning to begin conducting appraisals of audit staff after each audit, in addition to the existing annual performance appraisal system. These appraisals will serve as performance measures for the annual performance appraisal.

So, my questions are:

1. Is it okay to start this?
2. If I proceed, how should I go about it, as the immediate supervisor is responsible for conducting the appraisal?
3. What kind of form do I need to develop? Should it be audit-specific or include other issues like adherence to office policies as well?

Can you please suggest a few points for the form?

Please, dear friends, reply. I am waiting for your suggestions.

Thank you.

Dear Swati,

I can provide some inputs based on my understanding. Generally, organizations have set standards for auditing that audit staff need to adhere to; we call it the audit process.

When it comes to appraisal, it seems a little dicey to do it after every audit. Appraisal should align with the organization's appraisal cycle. However, we can definitely review auditors after each audit or set of audits if their durations are short. Various factors can be checked during the review, such as the number of observations, recommendations, corrections, and suggestions for processes. It also depends on the department and the nature of the business.

Alternatively or simultaneously, one can also conduct an 'Audit of Audit process,' which involves auditing the audit staff, their processes, methods, and outcomes. This can be done by senior members.

Ultimately, the above-mentioned aspects can form the basis for your organization's appraisal cycle for the audit staff. Since you are a financial concern, all audit-related matters must be very accurate. If someone has a background in finance, they will be able to provide more assistance.

By the way, it seems like you are doing a lot of work there. It's really great.

Friends, please share your views or any formats if you have.

Regards,

Swati,

As per my understanding, appraisals are not something that can be done every month or week. You can conduct performance evaluations and provide feedback after each audit. It is important to evaluate performance regularly as performance may vary from company to company that you audit.

I will provide you with some formats for conducting these evaluations.

All the best, and keep up the good work.

But friends, I am facing one problem: as far as any management tools are concerned, like performance appraisal, job description, KRAs, and any policies. My management, as they are all Chartered Accountants, so they don't accept it easily. I need to push them for it. So many implementation problems are there.

Swati,

Like we discussed earlier, we can also establish Key Result Areas (KRAs) for these permanent auditors. Additionally, a review of the audit process can be conducted. A form or Excel sheet needs to be created where all audit process-related points can be added. As you are a CA firm, you can discuss what points should be included along with the Heads of Departments.

Regards,

Hey Swati,

I don't really find a need to use the entire appraisal form for the auditors as they are timely. We should try to create a feedback form for the entire staff of the auditors. Let's include some questions in the feedback form that can help us identify the areas where the auditors can improve.

The feedback form should be slightly detailed so that we don't miss out on important points. For example, a sample question could be:

"What, in your opinion, is the reason behind the delay in the audit process?"

This question is designed to help us understand if the audit delays are due to management issues or inefficiencies in the auditors' work. I believe this approach will provide us with valuable insights.

I hope this makes sense.

Hey Swati,

It is a common problem that the HR tools are normally not accepted in the organization. The reason is we normally have only the tools. Present our Tools in the form of Numbers. What HR tools can do to numbers and how they can make it more efficient? Management is interested in costs. Tell them it will benefit the organization a lot and can also help in increasing efficiency. But for this, we need to carry out substantial homework so as to make ourselves comfortable with numbers and play with them. I personally implemented it and till date it has ironically succeeded. So I guess if I could, anyone could. So just go for it and show the management portrait of numbers.

Hello Swathi,

Kindly take a look at www.utsystem.edu/AUD/AuditorResources/AuditManual/SampleDocs/Auditor%20Performance%20Evaluation%20Template.doc and see if it triggers any ideas for you.

Found at performance evaluation of auditors - Google Search

Simhan
A retired academic in the UK

Dear Swati,

After each audit, the auditor must be required to submit individual reports regarding the audit conducted, as well as ways and methods to enhance the current process. The person should be required to provide their inputs, shortcomings, and other relevant findings of the organization that they audited.

Such a report should be submitted to his/her seniors. The seniors, based on these reports, should conduct quarterly reviews on both the knowledge and expertise the person has acquired while working within the company.

This submitted report would become a part of both the annual and half-yearly appraisals of the company's employees. One-third of the salary raise should be based on the reports submitted, and the annual appraisal should also be taken into consideration.

I hope this idea helps you in some manner.

Regards,
Octavious

Dear sir,

Thank you for your response. To make it a little more formal, may I request a feedback form for the audit to be filled out through a mutual discussion between the audit partner and the auditors who conducted the audit? This way, we can receive submissions from auditors to enhance the audit process effectiveness. Additionally, this approach will serve as motivation for auditors to perform better in their audit assignments.

Please advise.

Thank you.