Page 28 - 4. Pre-Course Reading-Training on Forestry Audit 2019

Auditing Forests: Guidance for Supreme Audit Institutions

conducting the audit. The following figure shows a flow chart of a risk-based audit approach, on the basis of whether a general or
specific audit is required.

Table 3.1
Flow chart of risk-based audit approach

STAKEHOLDER REQUEST* input

No
Specified GENERAL ISSUES
Yes
PHASE I: identify risks

SPECIFIC ISSUES
PHASE II: understand the actions by the forest
28 management entity to mitigating those risks
PHASE I: understanding stakeholders’ expectations process
PHASE III: evaluate and test the efforts undertaken
by the forest management entity to mitigate risks
PHASE II: Aligning topic and sub-topic
with the risk and vice versa (audit design matrix)
PHASE IV: choose audit topics and priorities

AUDIT PROGRAM output

DESIGN MATRIX tools

* it could also be a government or an auditor general or other relevant office/person

General issues
when audit topic(s) or sub-topic(s) are not clearly specified, the SAI should approach the audit by considering the existing risks,
the capacity of the management in mitigating those risks, and then prioritizing topics and sub-topics to be audited.

The Phases of General Issues are described as follows:

PHASE I: Identify risks
At this stage, the SAI is expected to be able to identify risks pertinent to each sub-topic in the audit. In identifying the risks, auditors
should take into consideration the special characteristics of forest in question and the key players involved.

Threats/Risks Characteristic to consider Key players

• Biodiversity and ecosystem lost • Type of forest • The government
• Forest fire risk • Tropical rainforest National forest service
• Illegal logging risk • Type of ownership • Other
• Conflict risk State owned Private companies
• Revenue risk Privately owned Local community
• Illegal use of lands, Concessions International community
• etc Traditional community
• Function of forest
• Status of forest
Protected forest
Productive forest
Hunting ground