Appendix 15

Specimen
internal
audit report
Overall rating and summary of findings Overview

Satisfactory The vast majority

Represents an assessment of a control environment of internal audits
that is satisfactory and supports meeting carried out during
management’s objectives. the period received
a ‘pass’ grade and
there were no ‘high
Adequate with opportunity for further development –
Medium priority for management to address priority’ observations.
Represents an assessment of an adequate control However, there were
environment that broadly supports management’s a small number of
objectives but has further opportunities for development. ‘medium priority’
and ‘low priority’
observations which
are discussed in
more detail below.
Unsatisfactory – High priority for management to Overall, the control
address
environment is in
A high number of control deficiencies or business issues good order and
where the potential financial, operational or reputation risk management are
exposure to XYZ is significant and management should working to resolve
address these issues immediately. the issues identified
during the audits.

Performance improvement opportunities (‘PIOs’) High Priority

Observation
s
Status High Medium Low Total No high priority
Priority Priority Priority observations were
noted.
New PIOs 0

Accepted PIOs 0
Governance, Code & Ethics
Finance & Commercial
Procurement
People
Quality
Information Systems

0 5 10 15 20 25 30

Pass Low Priority Medium Priority High Priority

Overview
A summary of the control environment and process improvement opportunities
identified as part of this internal audit is provided below:
Area Compliance/Good Practice Process improvement/
efficiency opportunity

Governance
, Conduct
and Ethics

Finance and
Commercial

Etc.

Detailed findings
This section summarises in the form of performance improvement observations
(PIOs) the issues arising from this review that we believe require action. PIOs are
rated using the scale in the legend below:

Priority rating for performance improvement observations raised

HIGH: Issues referring to
important matters that are
fundamental to XYZ’s system of
internal control.We believe that
the matters observed might
cause a business objective not
to be met or leave a risk
unmitigated and need to be
addressed as
a matter of urgency.
MEDIUM: Issues referring
mainly to matters that have an
important effect on XYZ’s
controls, but do not require
immediate action. A business
objective may still be met in full or
in part or a risk adequately
mitigated, but the weakness
represents a significant deficiency
in the system.
LOW: Issues arising that
would, if corrected,
improve XYZ’s internal
control in general,
but are not vital to the
overall system of
internal control.
No Priority Issue Risk Performance Management Responsibility/
Improvement Response Date
Observation

Governance, Conduct and Ethics

1 LOW

Finance and Commercial

2 HIGH

MEDIUM

Etc.

3
Appendix: Scope of work and audit approach

Objective Issues/controls being reviewed Internal audit approach