ACTIVITY: STRATEGIC OBJECTIVIES FOR PCA (page 63)

Strategic Objectives:
1. Improve our client’s experience: by enhancing the quality of our service to customers
and listening to their needs and expectations.

2. Attain reputational excellence: by continually improving the efficiency and

performance of our operations and practices across the industry.

3. Nurture sustainable, collaborative relationships: with our people, entertainment

network and clients.

Positive Impacts:
1. Cost Reduction: Effective procurement can help businesses reduce costs by
purchasing items in bulk or through negotiated contracts1. This can be particularly
helpful when there is a large budget constraint or when there are expensive
requirements that must be met.

2. Efficiency Improvement: Procurement can speed up the purchasing process by

working with suppliers in advance, ensuring that all necessary paperwork is
completed in advance.

3. Quality Improvement: Procurement helps businesses to get the best possible deals and
know what they need. By tracking purchases over time, procurement can help
businesses identify trends and patterns that may indicate that they need to purchase
something new or expand their current product line.

4. Risk Reduction: Procurement can reduce risks associated with procurement by doing
research on potential suppliers before making a commitment.
Adverse Impacts:
1. Inefficient Procurement Practices: If procurement practices are not managed
proactively, it can lead to inefficiencies and increased costs.

2. Poor Supplier Selection: If due diligence is not done while selecting suppliers, it can
lead to poor quality of goods and services, impacting the company’s operations and
reputation1.

3. Lack of Internal Collaboration: If procurement does not facilitate internal

collaboration with stakeholders, it can lead to missed sourcing opportunities and
reduced organizational agility and efficiency3.
It is very important to manage the procurement processes effectively to drive business value
and bottom-line growth.
ACTIVITY: OPERATIONS OBJECTIVIES FOR PCA (page 68)
1. Internal Audit Objectives for OA of Procurement Operations
1. Provide and independent and objective review the procurement process including
purchasing, receiving, inventorying, and deploying.

2. Determine the efficiency and effectiveness regarding controls related to the

purchasing, and inventorying processes.

3. Validate the hand-offs between the procurement, inventory, and deployment

processes. Identify best practices, gaps/deficiencies, and recommend improvements.

2.Questions to Ask to maximize use of protocols:

1. What roles perform what tasks/activities within the procurement process?

2. What controls are in place to reduce loss/theft?

3. What controls are in place to ensure purchase follow the procurement process?

4. What controls are in place to ensure the PO is properly approved?

5. What controls are in place to ensure items received validated against invoice, are
inventoried, and accounted for physically?

6. What processes are in place to ensure deployed items are appropriately documented
within the inventory?

3.Questions to Ask on How to increase Efficiency

7. What are the results of survey’s regarding the procurement process from business
leaders?

8. What tasks within the process have the highest error ratio?

9. What tasks are currently manual?

10. What tasks cause the great amount of delay?

Advisory Relationship

1. Making reports and presentations more useful by soliciting management input

regarding the format and style.

2. Being accessible and responsive to management requests and questions.

3. Effectively managing expectations by defining boundaries, establishing a working

agreement, agreeing to methods and frequency of communications, and establishing
measurable success criteria.

4. Establishing a contact program, scheduling meetings with management outside the

audit and on a regular basis.
 5. Making meetings more valuable by establishing an agenda and specific goals, sending
pertinent information in advance, and establishing 'next steps'.

6. Staying current on what's going on in the organization, viewing issues from a business
perspective, and listening to management's needs.

7. Being more solution-oriented than condition-focused and helping management to

develop strategies.

8. Proactively investing time and effort on preliminary work in new areas to build a
competent level of understanding.

9. Attending key management meetings.

10. Engaging management in the audit process through brainstorming sessions, allocating
tasks to perform, and giving management options (not just telling).

11. Keeping management in the loop regarding progress of the review.

Assess your knowledge

1. Business Knowledge – internal to the organization, including its mission and strategy,
and the business it engages in as well as the broader world of business.

2. Industry Knowledge – keeping up-to-date on current and emerging trends, issues,

risks, practices, and associated regulatory, economic, technological, and social
matters.

3. Market Knowledge – in terms of key competitors, products, and services.

4. Technical Knowledge – professional-based disciplines and practices — such as The

IIA’s International Professional Practices Framework (IPPF), which includes the
International Standards for the Professional Practice of Internal Auditing — and
business process-related knowledge such as supply chain.

5. Understanding current best practices, developments, and risks; being able to simplify
complex processes; explaining your vision of the process; and understanding the
functional inter-relationships between processes.

6. Client Relationship Management – understanding the needs of internal audit

stakeholders and partnering with the audit client or stakeholder throughout the audit
process.

7. Soft Skills – understanding and respecting management diversity and differing social
styles.

8. Communication Skills (a pre-requisite to operational auditing) – including: o

Interview skills.

9. Presentation skills.
 10. Written communication skills.

11. Problem-solving Skills – taking time to define the problem, and then to analyze
relevant, sufficient data and information to identify the root cause.

12. Creative Skills (essential for solution development) – looking for new and unique
ideas.

Meeting with Audit Clients:

1. Emphasize the need to involve audit client management early in the planning phase of
the operational audit engagement, so that the project plan is management-oriented.

2. Explain that the objective of the initial planning meeting with audit client
management is to understand the business of the activity from client management’s
perspective, such as management’s key responsibilities, as well as internal/external
customers’ or stakeholders’ needs and expectations from the operational audit (i.e.,
issues and opportunities that need to be addressed).