1. Operational Auditing--Fall 2003 Control Self Assessment (CSA) 4 Methodology 4 Review and Identification –Key business objectives –Related risks –Mitigating controls

2. Operational Auditing--Fall 2003 CSA-History 4 Introduced by Gulf Canada in 1987 4 Gulf used facilitated meetings

3. Operational Auditing--Fall 2003 Facilitated Meetings 4 Management and staff participate through interviews and polling 4 Objectives 4 Risks 4 Processes 4 Soft and/or informal controls

4. Operational Auditing--Fall 2003 General Methodology 4 Shared process 4 Assessment of internal controls 4 Evaluation of risks 4 Development of action plans 4 Assess the likelihood of achieving objectives 4 SJSU simulation

5. Operational Auditing--Fall 2003 General Approaches 4 Facilitated meetings--group workshops 4 Questionnaires--yes/no answers 4 Management analysis--self studies

6. Operational Auditing--Fall 2003 Uses 4 Self analysis for risk* 4 Selection of audit areas* 4 Internal control review* 4 Special projects 4 Soft control analysis * alternatives to the traditional approach to the I/A process

7. Operational Auditing--Fall 2003 Benefits 4 Increases I/A scope 4 Target review of high risk areas 4 Increases the effectiveness of corrective action 4 Builds team-oriented relationships

8. Operational Auditing--Fall 2003 What Is Storyboard Flowcharting? 4 New method for documenting a process. 4 Clean and simple flowcharting method. 4 Allows for clients and auditors to clearly understand process under review. 4 Simple technique that requires a good graphics package and a little imagination. 4 Can use Microsoft PowerPoint, Harvard Graphics, Corel Draw, etc. 4 Does not replace IS flowcharting.

9. The Basics of Storyboard 4 Meet with client and document process. 4 Use your imagination to choose/draw picture. 4 Under picture write narrative for each step represented. 4 Be creative - good control narrative in green; poor controls in red. 4 Completed storyboard must be reviewed with client. 4 Make any changes necessary. 4 Final copy should be in color for most effective presentation. 4 Different process may require different approach.

10. Operational Auditing--Fall 2003 How to Storyboard Meet with client and document process. From client interview create storyboard. A A Print out story board - black and white draft and color for final. Review storyboard with client and obtain sign off.

11. Operational Auditing--Fall 2003 Start Customer Service Rep Receives Order Scan Form Into System Shipping Files Yellow Customer Service Rep Researches And Corrects Information Shipping Pulls And Packs Orders End By Phone? By Mail or Fax? On Standard Order Form? Shipping Sends Order and Green Copy (Invoice) Customer Service Rep. Key Enters Data on-Line Approved By Manager? Send to Special Order Department Print Three-Part Shipper Yellow and Green To Shipping Department Pink to Accounts Receivable Department YES NO YES Company XYZ Order-fulfillment process NO

12. Operational Auditing--Fall 2003 A A Customer Representative Receives orders by fax or mail. Receives orders by phone. Standard orders are scanned into system. Customer Representative enters order data on-line. A three-part packing slip is printed per order. Pink copy sent to accounts receivable department. Company XYZ Order-fulfillment process Packing slip approved by Manager. If not approved, returned to Customer Representative for correction Packing slip Yellow and green copy go to shipping department. Shipping pulls and packs orders. Yellow copy filed in shipping department. Green copy sent with order.

13. Operational Auditing--Fall 2003 Work Paper Purposes 4 Documentation of evidence 4 Audit execution and planning tool 4 Follow-up reference 4 Review facilitator

14. Operational Auditing--Fall 2003 Other W/P Factors 4 Ownership: the company 4 Preparation guidelines –Completeness & accuracy –Clarity & understandability –Legibility & neatness –Relevance –Attention to detail

15. Operational Auditing--Fall 2003 Sample Work Paper Heading Ref. Review T/M Legend: Source Purpose: Conclusions

16. Operational Auditing--Fall 2003 Flowcharting Begin or End File Decide Document Activity