Do you ever feel unprepared when an internal audit deadline is near?
Are you unsure which processes need the most attention or how to gather the right documentation efficiently?
Do you worry about missing critical steps or overlooking important risks during a review?
These are a few common challenges internal auditors face when managing complex audits.
An internal audit checklist solves them by providing a clear roadmap for the entire process. This blog explains the key steps to streamline the audit process. We’ll also touch upon how outsourcing to internal audit service providers like Paragon Consulting Partners make checklist management faster and more congruent with international auditing standards.
What Is Internal Audit?
An internal audit is an independent review of an organization’s operations, governance, internal controls, and risk management. It evaluates how well processes work and identifies areas where improvements can make the organization more efficient and effective.
Internal auditors perform objective assessments by examining policies, testing controls, and reviewing documentation. They also conduct interviews and inspect evidence to understand the organization’s processes and verify that controls are functioning as intended.
The purpose of an internal audit is to detect weaknesses before they become serious problems. It helps organizations stay compliant, manage risks, and improve performance in every function.
Step-by-Step Internal Audit Checklist for a Smooth Audit Process
Use this six-step checklist to plan an internal audit from start to finish.
Step 1: Lay the Groundwork for Your Internal Audit
So, where do you begin when an internal audit is scheduled?
The first step is to fully understand why the audit exists and what it aims to achieve. Ask yourself questions like:
- What risk or concern is driving this audit?
- Why did leadership request an internal audit’s involvement?
- How does this process tie into the organization’s goals?
Answering these questions will help your audit team stay focused and relevant.
Look into the audit history as well. Was this process reviewed before, and what were the findings? Were prior issues properly addressed? Has the process changed recently, or are there new risks that need attention? These insights give auditors context and help avoid repeating past mistakes.
Of course, it helps to check in with the business owner before the audit kicks off. Confirm whether team changes or shifts in priorities affect the audit’s urgency. And don’t forget to review relevant standards, frameworks, and regulations that apply to the process.
Finally, keep top management in the loop. Regular updates, whether quarterly or biannually, build trust and ensure everyone is on the same page.
Step 2: Engage Risk and Process Experts
Let’s say you face a process audit in a Dubai-based firm. Before diving in, you need input from risk owners and process subject matter experts. These people know daily operations, local regulations, and business pressures.
Here are a few questions you can pose to them:
- Who in the UAE business units understands the recent anti-money laundering (AML) controls?
- Who handles VAT compliance?
- Which teams monitor adherence to Central Bank reporting requirements?
- Who tracks economic-substance rule compliance across business units?
In many Gulf‑region firms, internal audit functions use a risk‑based audit plan that aligns with UAE exposures like economic‑substance rules or Central Bank AML frameworks.
You also want to ensure that these experts join the audit planning early, so they help shape the scope. When they bring their insight, you can spot emerging risks and leverage deep domain knowledge.
Step 3: Pick the Right Frameworks for UAE Audits
Before you design your audit program, you must decide which standards to lean on. In the UAE, many internal audit teams follow the IIA’s International Professional Practices Framework (IPPF). This framework sets out principles, guidance, and performance criteria that help auditors plan work, document evidence, and report results in a structured way.
Some teams also use the Committee of Sponsoring Organizations (COSO) of the Treadway Commission’s Internal Control Integrated Framework known as the COSO framework or ICIF, to assess risk and controls in a consistent manner. This framework explains what strong control environments look like, how risks should be evaluated, and how monitoring activities should be carried out.
Because UAE companies operate under regulatory pressures that can shift quickly, such as Central Bank rules or Securities and Commodities Authority (SCA) corporate governance guidelines, combining IPPF and COSO gives auditors a dependable foundation. This combination ensures that audit procedures meet global expectations while still reflecting regional requirements, such as documentation standards or board reporting needs.
In other words, you pick frameworks that balance global best practices with local regulation. That way, your internal audit team will be able to deliver assurance that is technically sound, regionally aligned, and practical for day-to-day decision making.
Step 4: Get Ready for the Planning Meeting
Next up, schedule a planning meeting with the audit committee, risk leads, and process owners. During the meeting, clarify objectives, timelines, responsibilities, and reporting requirements, particularly under UAE regulatory frameworks. For example, confirm whether recent changes in internal governance or financial reporting rules affect the audit scope.
Then review the internal audit charter and the reporting structure to the board or committee so the team knows how information will move. It also makes sense to invite participants to point out recent challenges or high-risk areas that may influence the audit. In doing so, each person understands their role and expectations, which may include responsibilities like documenting control gaps or coordinating with process owners.
Later on, this shared knowledge will help reduce delays and confusion during fieldwork because every person knows exactly what the next step should be.
Step 5: Draft the Audit Program
At this stage, auditors map testing procedures to risks, control points, and regulatory requirements. For example, the program could cover VAT transaction testing, AML compliance checks, or other UAE-specific controls that fall under local laws. It should also state which documents, reports, and systems will be examined and which personnel will be interviewed so the review stays grounded in real processes.
It is worth noting that the depth and accuracy of an audit generally depends on the careful sampling and evidence collection methods, like system exports or step-by-step walkthroughs. To achieve that, it helps to include UAE-specific enterprise resource planning systems or tools so the program reflects the technology and workflows used inside the organization.
There is a tangible benefit here because stronger procedures allow auditors to address high-risk areas with better clarity and alignment with local requirements.
Step 6: Review the Audit Program Before Fieldwork
Before fieldwork begins, conduct a formal review of the audit program with senior auditors, control owners, and risk managers. For example, verify that all high-risk areas and UAE regulatory obligations are fully covered.
After that, run a small dry-run of key tests to confirm that each step can be carried out with the data and systems currently available. Incorporate feedback from stakeholders and adjust sample sizes, timing, or methodology as needed. You’ll see that one direct consequence of this support from management and the audit committee is a final version that reflects a shared understanding of risks and responsibilities.
An audit program thus examined then guides the audit team toward smooth fieldwork, credible sampling, and trustworthy audit findings.
Outsource Your Internal Audit. It’ll Make Your Life Easier.
If you’ve been handling internal audits yourself all this time, you probably already know how quickly things become complicated. Teams familiar with the processes may still overlook risks or minor errors because of routine habits. More often than not, office relationships and existing dynamics cloud one’s judgment and hide issues that require attention.
Moreover, audits consume a considerable amount of man-hours, and assigning internal staff to them can divert attention from daily operations. On top of that, smaller organizations generally do not have trained auditors on their payroll, which can create challenges in applying international standards or even UAE-specific regulations. Determining the audit scope, reviewing controls, collecting evidence, documenting results, and preparing actionable recommendations can all be a tall order in the absence of experienced guidance.
Outsourced internal audit services give you access to experts who have conducted these audits many times and done so with proven success. They deliver objective insights, devise clear action plans, and help implement best practices across departments and processes. Their expertise also ensures proper handling of UAE-specific ERP systems, reporting requirements, and compliance documentation.
We are proud to have worked with a wide range of organizations, from small companies to multinationals operating in the UAE, and helped them meet local and international auditing standards. Contact us to explore the benefits of outsourcing your internal audit or learn more about our assurance services.
