2011 Maximizing the benefits of effective project management

Jul-2017

OAG Guidance

In order to develop and monitor a project plan, define the audit tasks in an appropriate level of detail. Agree arrangements for monitoring progress of the tasks in the plan within the engagement team and, as necessary, with the client.

Duration of Tasks

Task definition is important as a basis for sensible monitoring and control. Micro-management may be inefficient, but control is impaired if tasks are defined at too high a level because time over-runs and the need for corrective action may be identified too late. The number of these tasks will depend on the size and complexity of the engagement. The most effective task duration tends to be between a half-day and two to three days.

View actual size

What is appropriate will depend on the size of the audit, the complexity or the importance of the task and the experience of the individual to perform it. Avoid defining tasks so small that controlling their progress becomes bureaucratic and the time taken outweighs the benefit.

If there are concerns about the conduct of the audit, including the reliability of the client in producing information on time, it may help to define smaller tasks so that, for example, problems of client non-delivery of information surface more quickly.

Audit Tasks

The following sections include some of the tasks and the corresponding activities that a team member monitoring the project may undertake at different stages in the audit. Some of these tasks would not be necessary or applicable for a small engagement.

OAG Guidance

Just as the audit is not completed by the creation of an audit plan, project management is not achieved by the creation of a project plan. Undoubtedly, the planning during the planning phase of the audit is crucial, but this represents the beginning of the process. Typically, the following areas are covered in the initial team planning discussions (Plan for Planning meeting).

• Complete Acceptance and Continuance assessment. The engagement leader performs the assessment. The team member monitoring the project checks that the assessment is correctly signed off and that the listing of identified significant risks is imported into the audit file. For additional guidance, refer to OAG Audit 3011 and OAG Audit 5011.
• Mobilize the client. The team manager and engagement leader will determine how they will mobilize the client and what needs to be discussed. Project management involves making sure that the meeting takes place and an agenda or report is prepared by the team manager for the meeting. Tasks to be completed for the meeting include:
  • schedule meeting with the client, and
  • send agenda in advance.
• Issue engagement letter. Some engagement teams will require assistance in drafting engagement letters. Project management involves providing assistance in preparing information for review by the engagement leader, such as the list of entities to be included.
• Build the engagement team. The team manager will be responsible for determining what resources will be necessary for delivering the audit, even at a high level, before the detailed audit planning takes place. Project management involves taking the resource plan and confirming that the necessary resources are booked on the staff planning systems.
• Prepare for team planning meetings. Project management involves making sure that the meetings are scheduled and that the members of the team are properly prepared, including whether there is an agenda and an outline of the project plan.
• Team planning meetings. Project management involves recording the actions that take place as a result of discussions during the team planning meetings, the record of the decisions and agreed upon actions resulting from each meeting. Project management involves the assessment and understanding of how the progress of the project is to be monitored. Items to consider when deciding how the project progress will be monitored:
  • Status of completion of tasks according to the task plan
  • Status of meeting schedules
  • Status of budget against actuals
  • Frequency of reporting progress
  • Method of reporting progress
  • Matters which require immediate attention and action
• Develop project plan. The project plan is shared with the whole team and is used to monitor the progress of the audit. Good project management techniques include the use of key milestones, event decision points that mark the critical path for the audit. These milestones represent key points against which the progress of the audit is reported. Tasks to be assessed and included in the project plan:
  • Prepare tasks summary. Audit-related tasks will be identified, planned and scheduled at an appropriate level of detail. The members of the engagement team will determine what tasks need to be completed to provide a high quality audit, and the team member monitoring the project will supplement this list with the tasks that need to be completed to achieve an efficient audit. Project management involves coordinating this listing into a summary of tasks forming the basis of the project plan.
  • Prepare resource plan for key tasks. The engagement team will determine who will be responsible for which tasks, and this will be reflected in the project plan, enabling the team to monitor progress more effectively.
• Coordinate audit budget monitoring activities. The engagement team will identify the amount of audit effort required to undertake the tasks. Project management involves coordinating the consolidation of the budget and reporting against progress of the actual time spent.
• Define client deliverables (client assistance) schedule. The members of the engagement team need to determine what deliverables will be required from the client. These deliverables can take the form of specific meetings, documents to be provided or key decisions to be made by a certain date. Project management involves coordinating and consolidating the list for review by the team manager, and updating the schedule when the items are provided by the client.
• Schedule client meetings (including clearance and debriefing meetings). Arranging client meetings is an important task and will be arranged as early in the audit process as possible. A list of meetings will be kept, with expected attendees (both from OAG and the client), and the dates of the arranged meetings. This list is a useful checklist to monitor whether all client meetings have been arranged and who will (and actually did) attend. Deadlines for completing the audit will be known in most circumstances, and project management involves scheduling the meetings appropriately compared to the deadlines.
• Schedule internal meetings (including taking stock, clearance and debriefing meetings). These meetings will be scheduled in advance to coincide with key decision points in the audit process and to the extent possible, the dates will be committed to the engagement team’s diaries.
• General project monitoring. Project management involves continually monitoring the status of the project plan throughout the audit against project plan milestones, and summarizing and sharing progress with the team at taking stock meetings. Tasks to be completed in monitoring the status of the project:
  • Follow up on actions agreed in the taking stock meetings. There is little point in taking stock unless the outcome of these meetings is acted upon. The individuals given the responsibility of taking the actions have to deliver. Project management also involves collecting information on progress to be reported back to the team so that items can either be closed, or another decision or action is taken.
  • Monitor client deliverables and meetings schedules. Project management involves checking and reporting progress against the schedules by coordinating with the client contact using the information supplied by the engagement team. Where the client has committed to providing information or meetings and does not meet this commitment, evaluate the consequences and take corrective action as necessary.
  • Monitor budget performance. The team member monitoring the project obtains the actual hours using the Product Costing Report available on the Intranet. The engagement team members will report their estimates of where they believe that the budget for the respective tasks will be overrun. This information is consolidated and reported back to the team.
  • Review Staff Scheduling Report (available on the intranet). Using the information provided by the team for budget analysis, determine whether the resource plan needs to be revised, more resources are required or resources can be released.
• Report project issues to the engagement leader and/or the team manager. In some circumstances, there will be project issues that need to be raised immediately with the engagement leader and/or the team manager. Project management involves working with the team manager to produce an action plan to help resolve some of these issues.
• Update project plans. Project management involves updating the project plans for any variations agreed to with the engagement team. Any changes are communicated back to the team.

OAG Guidance

Project management tasks during the gather evidence phase of the audit are:

• Update the client. In managing the project, the team member make sure that update meetings with the client take place and that the client and the team are prepared for the meetings. Tasks to be completed to update the client:
  • schedule meetings between the client and the engagement and the relevant team members, and
  • send agendas in advance.
• Client meetings. The project management aspects of these meetings will ideally have taken place during the planning phase of the audit, with the meetings scheduled and agendas sent out in advance. Where the schedule of meetings is not clearly defined (e.g., in the first year of an engagement or where more meetings are required as a result of decisions taken during taking stock meetings), the team member assigned to this project management task can arrange these meetings. The team member monitors which meetings have been arranged, which have been completed and which have been documented. There is no prescribed format for monitoring these meetings; however, in practice, teams may use a spreadsheet to keep a record of the date arranged, attendees, completion of an agenda and confirmation of documentation. Tasks to be completed for client meetings:
  • schedule meetings in advance;
  • send agenda in advance and attach it to the audit file; and
  • confirm that the audit file is updated as appropriate, e.g., the meetings are documented by the appropriate team member.
• Taking stock meetings. The taking stock meeting is used to measure the progress of the audit against the audit plan to determine whether adequate audit evidence has been gained, with appropriate follow-up actions determined. During these meetings, the team member assigned to this project management task will update the team on the status of the project, e.g., the number of meetings completed. It is important to revisit the objectives at each taking stock meeting, to highlight where there may be a risk that an objective is not met (such as improving client service), and to agree on an action plan for the objective (such as contacting the financial controller once a week to discuss any issues). Tasks to be completed for taking stock meetings:
  • schedule meetings in advance;
  • invite all relevant team members including specialists and internal experts as relevant;
  • take meeting notes and determine any actions, including who is responsible for the actions and by when;
  • report on project progress; and
  • highlight any issues on the progress of the project.
• Agree year-end audit work. The amount of year-end work will usually be determined during a pre year-end taking stock meeting. At this point, the team determines what other auditing procedures will be performed (i.e. substantive testing). From a project management perspective, this decision may mean that more information is required from the client and that the client deliverables schedule needs to be revisited. The engagement team members will determine what information needs to be provided and by when. In managing the project, the team member will coordinate with the client contact and communicate the requirements. Tasks to be completed during the agree year-end work phase:
  • send out any amendments to the client deliverables schedule.
• Year-end audit work. The team member assigned to this project management task may be required to set up more meetings with the client. However, engagement team members may arrange time directly with the client staff to be more efficient, e.g. when only short meetings are required on specific documents or issues. Tasks to be completed during the year-end work phase:
  • check that the team is updating the audit file; and
  • follow up with the client for agreed deliverables, keeping a record of delays and overruns.
• Engagement leader clearance. The engagement team will need to meet to review the final results of the audit with the engagement leader. The team member assigned to project management tasks may be required to attend to update the project status, e.g., update compared to budget. Tasks to be completed for the engagement leader clearance:
  • confirm that the agenda is ready for the meeting.

OAG Guidance

Project management tasks in the completion phase of the audit are:

• Clear with the client. In managing the project, the team member will send the agendas or reports in advance of the clearance meeting to the client. If the project has deviated from the plan in terms of the schedule of meetings or deliverables, this information will be shared with the engagement leader and team manager so that the client is made aware at the appropriate time.
• Debrief the client. In managing the project, the team member can make a valuable contribution to the agenda for this discussion with the client because of many of the performance aspects he or she has been coordinating throughout the engagement. These may include items such as
  • adherence of the client team to the meetings schedules,
  • performance against the agreed deliverables schedules, and
  • impact on resourcing the engagement as a result of delays.
• Debrief the team. The team member assigned to project management tasks can comment on the team’s performance in helping to manage the success of the engagement, reflecting on what went well and where improvements are needed. The effectiveness of the project management will also be considered, and ideas to develop and improve the engagement will be documented as action points to be taken forward to the next year’s engagement. Tasks to be completed in debriefing the team:
  • arrange meeting,
  • send agendas in advance,
  • record key points discussed,
  • report on project performance, and
  • incorporate results into the plan for the next year.

OAG Guidance

Some critical success factors for effective project management are

• effective use of diaries and advance booking of all meetings (entity and internal);
• a team member monitoring the project with a clearly defined role and time allocated to perform the tasks;
• a detailed project plan, including key milestones;
• a flexible approach—adapt the tools available to best suit the entity—don’t over-engineer—strike the right balance;
• regular monitoring of status—comparing actual results against the plan and updating the project plan;
• clear policies regarding when taking stock meetings are to be held and what is to be reviewed at each meeting;
• clear policies regarding timeliness of documentation;
• clear policies regarding overdue tasks;
• sufficient time booked at each audit visit to complete tasks on a timely basis;
• an identified entity contact to assist in arranging meetings and booking visits; and
• proper coaching from the engagement leader / team manager so all team members understand exactly what is expected of them.