“We’re deeply sorry” was all CrowdStrike could say after a faulty software update caused the famous Blue Screen of Death (BSD) for millions of users worldwide. In addition to the 10% fall in stock price in a day, CrowdStrike was answerable to angry customers and the US Congress, no less.
While this might seem like an extreme case, inadvertent errors are pretty common in business. With multiple teams across geographies working on complex problems, any number of things could go wrong.
One of the most common—and effective—ways to prevent such disasters is the internal audit. With a strong process and Governance, Risk, and Compliance (GRC) software, organizations can proactively identify potential problems and address them beforehand.
In this blog post, we’ll walk you through how you can create an audit strategy and implement it with a powerful internal audit checklist.
How to Create an Internal Audit Checklist (+Template)
Summarize this article for me pleaseWhat Is an Audit?
An audit is a process for systematically examining and evaluating processes. These processes could be financial, operational, or compliance-related.
For example, internal auditors regularly look into the bank statements of their business to evaluate them for errors or fraudulent transactions.
A service organization, such as a restaurant or a spa, might conduct audits of how the staff completes the delivery. Technology firms often use dogfooding as a way to conduct internal audits as well.
Why is an internal audit needed?
Simply put, an internal audit is designed to catch problems before any work is published to the outside world. This ensures the following:
- Accuracy: Audits give teams an additional chance to ensure that the work is accurate, complete, and error-free
- Risk management: Internal auditing identifies potential risks, which can be mitigated in advance to avoid losses and penalties
- Quality: Audits also help in ensuring the quality of output, verifying whether they meet the requirements and industry standards
- Performance: Internal audits sometimes evaluate performance to simulate a real-world situation
- Compliance: Being the most common reason, internal audits help adhere to applicable laws, regulations, and standards
- Stakeholder assurance: In businesses where there are investors or shareholders, internal audits build confidence in the organization’s operations and reporting
What are the types of audits?
Depending on the nature of your business, goals, needs, and stakeholders, you can perform a number of different audits. Most of them will fall into the following three categories.
Internal audit
An internal audit is conducted by the organization for its own needs. The auditors are active employees of your organization or subject matter experts within the department who execute it.
For example, every year, the talent management team might conduct an internal audit of compensation structures for each employee. This would be used to identify any unconscious biases or inequities.
External audit
An external audit involves bringing independent experts to evaluate the processes or output of an organization. In addition to the internal audit team, external auditors provide a broader range of knowledge and experience. This lends credibility and builds confidence in the organization.
Industry bodies and standardization organizations regularly conduct external audits for companies. ISO certifications are the most sought-after across industries.
Other examples include the Forest Stewardship Council for sustainable forest management, LEED for building design and management, and Leaping Bunny for products 100% free of animal testing.
Compliance audit
Compliance audits assess whether an organization adheres to specific laws, regulations, or internal policies. These audits focus exclusively on conformity with industry standards, contractual obligations, or governmental regulations to avoid penalties and maintain ethical practices.
In the technology space, regular audits for GDPR or HIPAA compliance are a standard practice. Each industry has its own compliance requirements, which organizations need to conduct regular audits for.
Whether you’re doing it internally or getting external help, audits are a necessity if you’re running a business. It assures every stakeholder—customer, investor, shareholder, employee, vendor, partner, etc.—that the organization meets their standards.
To ensure that, you need a comprehensive and goal-oriented audit strategy. Here’s how you can create that.
Summarize this article for me pleasePreparing for an Audit
Before you start any audit, prepare yourself thoroughly. This will set a strong foundation for the auditing process over time.
1. Set audit objectives
Clearly define the purpose of your audit. Trace the history of the problem and understand the context while doing this.
For example, an engineering head might request a DevOps audit because the number of production rollbacks in the last six months has been high. In that case, don’t set the objective as “conduct DevOps audit.” Instead, make “identify reasons for production rollback” your goal.
2. Determine audit scope
This section determines how you are gonna conduct the audit. A good way to approach this is the 4Ws.
- Who: The people and departments responsible for and executing the audit
- What: The processes or systems under audit
- When: The timeline within which the audit must be completed
- Where: The physical boundaries of where the audit needs to be performed, if any
For example, while performing a DevOps audit, the scope might look as follows.
Who: The engineering lead is responsible for audit oversight. The audit team, comprising two developers, two quality analysts, and three DevOps engineers, will execute.
What: The CI/CD pipeline will be audited, including all automated and manual processes. SOC 2 compliance software is also included.
When: The audit will be performed during the eight weeks starting July 1, 2025.
Where: The process audit will be conducted in the staging and production environments.
3. Break down audit areas
Once the scope of work is ready, break it down into smaller manageable sub-projects, tasks, and sub-tasks. Group related tasks together and organize them systematically.
4. Create specific tasks and questions
This is the step where you actually make the internal audit checklists. Here, you list all the actionable and measurable tasks for each area of the audit.
For example, a DevOps audit checklist might include questions such as:
- Is the code bug-free before the production push?
- What % of known bugs are sent to production?
- Is there a code review by the senior developer before production?
- Is an IT compliance audit performed before production?
- Who has access to make the production push?
Some pointers while creating your internal audit checklist are:
Keep it simple: Use clear and concise language that avoids unnecessary complexity. Focus on actionable tasks that everyone can easily understand and follow.
Make it relevant: Align your checklist with the audit’s objectives, scope, and applicable standards. Include only items directly addressing the areas you are auditing.
For instance, if you’re creating a GDPR compliance checklist, avoid adding any other legal requirement to the same audit.
Maintain consistency: Use standardized formats, terminology, and assessment criteria across all tasks.
5. Prepare necessary documentation
Determine the specific records, reports, or data that will verify compliance or operational effectiveness for each checklist item. For example, in a financial audit, you may need balance sheets, invoices, and tax filings.
For the DevOps audit, you might need standard operating procedures (SOPs), roles and responsibilities matrix, production release processes, etc.
6. Finalize and standardize
Conduct a small-scale meta audit to check for redundancies, gaps, or unclear items in your audit checklist. Use the results to refine the checklist and improve its usability and effectiveness.
Format it for clarity, with organized sections and space for notes or findings. Standardize it for future audits to ensure consistency and ease of use across the organization.
Summarize this article for me pleaseExample of an Internal Audit Checklist
When your preparation is complete, you will have an internal audit checklist that will something like the one below.
Audit objectives and scope
This is a short section that outlines the goals and objectives of the audit process. It also includes the RACI matrix and escalation processes.
Audit checklist
This would include all the work that needs to be done as part of the audit process. Some commonly used items would be:
Preparation
- Collect all relevant information and access
- Schedule work to be completed each day
- Get necessary approvals from key stakeholders
Audit implementation
- Measure the efficiency of each process
- Identify bottlenecks
- Review key performance indicators and corresponding metrics
- Evaluate compliance with policy
- Run the Sarbanes-Oxley Act SOX compliance checklist
Follow-up actions
- Document findings
- Provide recommendations for corrective and preventive actions
- Assign responsibilities and deadlines for resolving issues
- Update the compliance checklist
- Schedule follow-up audits to monitor progress
Audit outcomes
The typical output from an internal audit would be a report to the corresponding stakeholder describing the findings and recommendations.
For example, if the DevOps audit revealed that rollbacks are caused by sending erroneous or faulty code to production, the audit report will mention that. Moreover, it might also suggest a formal code review process to prevent rollbacks in the future.
You’re all planned and ready; let’s see how you can conduct your audit right.
Summarize this article for me pleaseConducting an Audit: Step-by-Step Process
Just to reiterate, the preparation of the audit is arguably the most critical step in the process. It determines what you’re auditing for, how, when, and where. So, before you begin evaluating anything, complete your pre-audit activities and planning.
Create a comprehensive audit checklist, and then begin your checks.
1. Collect data
Bring together all the data that currently exists. For example, if you’re conducting a DevOps audit, your data might include:
- Existing reports from past production pushes and rollbacks
- Automated audit logs
- Existing retrospectives about why it occurred
- Architectural designs and other process maps
- Feedback from team leaders and members on the process
In some cases, you might also want to see data from the GRC software.
2. Do your checks
This might sound simple, but it’s certainly not easy. The job of the audit committee is to evaluate every single step in every process. Make sure you are careful and thorough.
- Go through all the data in granular detail
- Verify all the processes in your audit scope using your internal audit checklist
- If something is off, ask the relevant team member appropriate questions
- Make a note of your observations clearly at each step
3. Gather audit evidence
The difference between an audit and a random opinion is the evidence. A thorough internal audit will provide concrete evidence of the inefficiencies, anomalies, mistakes, fraud, or other deviations from the process. Focus on collecting sufficient, relevant, and reliable evidence to build a robust basis for your conclusions.
4. Analyze audit evidence
Analyze the evidence carefully to understand what’s happening and why. Use data analysis, benchmarking, and risk assessment techniques to identify patterns, anomalies, or areas of concern.
5. Report audit findings
Now, bring together the outcomes of your audit into a document. This would include:
- Goals: A short intro on what you set out to achieve
- Findings: Observations and conclusions based on the audit
- Recommendations: Suggested improvements for any inefficiencies or non-compliance observed
- Next steps: Future plans for the next audit or necessary changes
Though audits are par for the course of any organization, there are a number of things that could go wrong. Here are some best practices to avoid that.
Summarize this article for me pleaseBest Practices for Using an Audit Checklist
An audit checklist is your treasure map. It shows you the path you need to take to complete your audit mission. A clear, relevant, usable treasure map is critical to your success. Consider these tips while you’re creating your own.
Audit your audit checklist: Yes, you read that right. To ensure that your checklist remains relevant and effective, review it regularly. Update it to reflect organizational processes, responsible stakeholders, system changes, etc.
Look outside-in: Don’t be walled off from the outside world while creating your internal audit checklist. Consider industry standards and regulatory advancements periodically. This helps keep the audit checklist appropriate for its time and place.
Get feedback: Auditors need to maintain a sense of distance and authority to be taken seriously. However, this shouldn’t come in the way of collecting meaningful feedback from internal stakeholders, many of whom may be part of the process you’re auditing. Set up a documentation review process for collecting feedback.
Adapt standardized checklists: Industry bodies and certifying organizations are bound to have robust audit checklists already. Look for any of these available on Creative Commons licenses and adapt them to your processes.
Keep it digital: Use a digital checklist to maximize accessibility and efficiency. You might even find value in compliance management tools that provide real-time alerts, automations, and collaboration features. Let’s see how that would work.
Summarize this article for me pleaseTools and Resources for Creating Audit Checklists
Audits are lengthy processes that take up a lot of time and effort. A robust project management tool like ClickUp can help ease that up for you. Here’s how.
Structured planning with templates
Don’t feel pressured to start your audit template from a blank page. Adapt any of the publicly available checklists to your needs.
You can also use the fully customizable, beginner-friendly ClickUp’s Audit Plan Template to structure your work. With the help of this doc template, you can identify key areas for compliance needs, collect data, organize knowledge, and plan and execute the audit without any hassle.
Effective and reusable checklists
A good checklist is the foundation of your audit. So, create a checklist template that you can reuse over and over. If you’re not sure where to start, check out ClickUp’s Internal Audit Checklist Template. You can use this beginner-friendly, ready-to-use template to:
- Identify audit items
- Create reusable checklists with corresponding audit scores, effort levels, and other custom fields
- Duplicate and use whenever needed
- Collaborate with stakeholders and remain agile
Task management for audits
What’s an audit, if not a series of specific tasks? Manage your audits efficiently with ClickUp Tasks. Break down the audit into tasks and sub-tasks. Create smaller checklists within tasks, if needed. Collaborate with relevant people by @mentioning them in the comments. You can also assign action items to people as needed.
Audit automations
Audits are a collection of small repetitive tasks, many of which can be automated effectively. ClickUp Automations includes predesigned templates and triggers to support a wide range of scenarios.
- Need to update items on multiple checklists? Automate based on triggers in one of the lists
- Need to notify a stakeholder for highly non-compliant items? Automate tagging and @mentions
- Need to create new tasks based on audit score? Automate task creation based on status change
Collaborative insights
Keep your findings organized on ClickUp Docs. Share it securely with people for comments and suggestions. You can also directly create tasks from docs if needed.
For more complex problems, use AI. ClickUp Brain helps you generate ideas, summarize notes, and get progress updates instantly. You can also get answers to your questions about how the audit project is being managed.
With that, your audit is done, and the report is ready. What’s next?
Summarize this article for me pleasePost-Audit Actions and Improvements
The audit isn’t the final step. In fact, it is just a critical milestone in the continuous improvement cycle. This means that you need to do a lot of work post-audit.
Implement corrective actions: Execute the audit recommendations to resolve non-compliance, close control gaps, and fix inefficiencies.
For example, if the recommendation of the DevOps audit is to add a step for core review, implement that as part of your engineering project management.
Assign responsibilities: Integrate the audit recommendation into your processes. Assign responsibilities, set deadlines, and monitor progress.
Set up preventive measures: Once you’ve fixed the problem, set up measures to prevent it from recurring.
For example, you might implement an automated code review as part of your DevOps pipeline. You can also set up an approval process, which ensures that a senior developer clears the code for production push.
Update policies: Based on the audit recommendations, update internal controls, policies, SOPs, training, etc. Set up a process to regularly monitor changes to the legal framework and adapt accordingly. Make this a part of your organizational knowledge.
Track progress: Don’t wait till the next audit to know if it worked! Track and measure your progress at every step of the way. Use ClickUp Dashboards for real-time monitoring and performance reporting.
For instance, you can create widgets on ClickUp Dashboards for tasks with code review and rollbacks. Use this to monitor the correlation between the two and ensure that your audit recommendations are useful in solving the underlying issues.
Summarize this article for me pleaseNever Miss an Audit with ClickUp
Let’s face it. Mistakes happen all the time, especially when humans are involved. While this can’t be avoided entirely, they can be minimized with proper processes.
A good internal audit maintains the accuracy, effectiveness, efficiency, and integrity of organizational processes. It also helps maintain the standards of the safety, statutory, regulatory, and quality management systems. Frequent internal and external audits address risks and mitigate them.
On the other hand, frequent audits can also take significant time, resources, and budgets. The only way to consistently conduct audits and continuously improve processes is to operationalize them.
ClickUp’s project management tool is a powerful option for this. With its efficient task management, streamlined workflows, real-time monitoring, and effortless collaboration, ClickUp supports audit management at scale. Set up your custom audits on ClickUp. Try ClickUp today for free!
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