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CS Professional · Internal and Forensic Audit · Emerging Issues and Challenges

Lakshmi Pharma Ltd. has a three-member internal audit team but 40 locations and a growing volume of transactions. Management refuses to hire more staff. Which is the most practical way for the head of internal audit to deal with this resource constraint while maintaining coverage?

The most practical approach is to use continuous data analytics to screen transactions and prioritise locations for deeper review. This extends coverage with limited staff and focuses effort on high-risk sites, unlike shallow equal coverage, skipping risky locations, or accepting unreviewed self-audits.

  1. AAudit every location equally in a shallow manner each year
  2. BSkip high-risk locations to finish the plan on time
  3. CUse continuous data analytics to screen transactions and prioritise locations for deeper reviewCorrect
  4. DAsk the locations to audit themselves and accept their reports without review

Explanation

Analytics lets a small team cover full populations and flag exceptions, so scarce effort goes to high-risk locations. Shallow equal coverage wastes effort, skipping high-risk sites is unsound, and unreviewed self-reports lack independence.

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