Page 26 - Internal Auditor M.E. - June 2019

construction audit

Process Flow ‐ Auditing Variations
This is a recommendatory process and one should consider organizational requirement and make adjustments accordingly

Audit Phase Relevant Activities Documentation Variation Specific

‐ Specific Objectives and Scope (As given) covering key risk
Information areas
Required
Audit Scope
‐ Contract Review is important at this stage to adjust the
Audit Notification is scope as needed
Audit Pre‐ Audit Objectives
Planning Phase sent with Audit ‐ Key documents to be made available for next phase are
Engagement Letter Contract, LOI, Variation log(s), EI log (if separate),
correspondence log.

‐ Allocation of Budgeted Audit Cost to Variation Scope
Budget & Time Coverage
Allocation
Audit Opening Meeting Risk & Control ‐ The Risk & Control Matrix emphasis on key Risks (As
is conducted while Matrix given) in variations management and plan the review of
Audit Planning Audit Programme internal controls mitigating those risks.
Phase planning stage
documents are ‐ Audit Programme should be ready in this phase
discussed and finalized considering KRAs considered and after review of policies &
procedures.

Work Reivews

Validations
Testing Analysis to be Testing should be performed as per Audit Programme:
Audit Fieldwork Scope Coverage
Phase conducted inline with mapping 1) Variation requests are timely and clearly communicated
the Audit Programme 2) Variation Cost Assessment
3) Price charged, and conditions agreed
4) Compliance with policy & procedure and contractual
requirement
5) Documentation and audit trail
6) Staff competence and efficiency
Work Reivews 7) Back to back contracts
8) Variation orders are approved Cause assessment
Validations 9) Methodology and procedure to establish a variation
10) Follow-up and dispute resolution procedure
Audit Reporting Audit Closing Meeting to be Final Audit Report 11) Management Reporting
conducted to obtain
Phase management’s comments 12) Variation - Claimed in payment applications

26 INTERNAL AUDITOR - MIDDLE EAST JUNE 2019