A project is a set of activities that are performed over a period of time, resulting in a finished product. Projects are carried out within the resources allocated to them - financial, human, time, etc. Audits are nothing more than a project. They have a purpose, deadlines, and resources allocated for their implementation, provide for the implementation of certain procedures in a certain period of time and provide the customer with an independent audit report i.e. the finished product.

Audits, like any project, need to be skillfully managed so that their results meet the customer's expectations.

Audit is a project

While classic project teams projects are managed by project managers, in audit firms this role is performed by the head of the audit team. Like the project manager, the heads of the audit team manage the audit of the enterprise. In particular, they develop an audit plan, ses tasks for auditors – members of the audit team, monitor their implementation, resolve issues with the customer and within the working group and finally hand over the results to the client, bringing the audit to an end.

The role of the project managers is quite complex. They must be well versed in the specifics of the project. Without a deep knowledge of the specifics of the project manager will not be able to perform their functions, properly plan the work, determine its duration and assess the quality of tasks performed by project executors. The same can be said about the head of the audit. As usual, such functions are performed by the most experienced auditors, who are well versed in audit methodology, the practical application of International Standards on Auditing and audit procedures.

The project manager must have well-developed communication skills. During the project they have to communicate with different people. Everyone needs to be able to convey information so that it is understandable.

To perform various tasks, such specialists must have well-developed analytical, critical and abstract thinking at the same time. In addition, they must learn to think globally to understand the situation not only from within but also from the side. Auditors should have the same qualities. Clearly plan the work without losing any important details, competently appoint those responsible for the various fronts of work, check the quality of work performed and plan time – these are the main activities of the head of the audit. In addition, they have to deal with problems and even conflict situations with team and the management of the audit firm, as well as the customer.

Moreover, today working teams contain not only auditors. They may include tax advisors, financial analysts, accountants and lawyers. All of them are not subordinated to the head of the audit, but are at the disposal during audit.

Project management methods

If the audit is a project, and the work of the head is very similar to the work of the project manager, then there is every reason to apply project management methods in the work of audit firms.

The methodology of any project management is the standardization of its implementation. To date, certain templates have been created for project implementation, which will help to avoid many current problems and get a finished product as a result. At the same time, keep in mind that each project is unique, so the methodology is not a panacea, and you will have to think.

Agile, waterfall, event simulation, kanban, lean management and 6 sigma, scrum – all these are project management methods.

Waterfall (cascade method) is the traditional, most common and logical method of project management. The waterfall model involves the sequential process, broken down into stages or steps. It is usually applied to projects that can be divided into successive logical parts. In addition, no stage can be performed earlier than the previous one. The logic of such a project is easy to understand and describe.

Such projects have a clear plan, and the main task of the project manager is to ensure that project executors adhere to the plan and do not break deadlines.

Audit firms can use this method during statutory audits, where the process is divided into stages and strictly formalized. The cost of the audit is determined in advance and cannot be changed, and the client is not involved in the audit process.

Agile is an extremely popular project management method today. This is a very flexible management system, the features of which are the provision of the final product at each stage of work and the unclear end of the project. The main principle of work is the division of the project into short cycles (iterations), at the end of each the customer receives a certain product. Agile stages may not follow sequentially, but occur in parallel or in different order. The key point is that at each stage of the project implementation its product can be used.

Stages are called sprints, each of them contains a set of operations and timing of their implementation. Deadlines are scheduled immediately before the sprint. Sprint tasks are compiled into a backlog which is a special repository to which the product owner has access. To use th examples that are clear to the auditors, the sprint is the term of realization of short-term tasks within one long-term one. Annual consulting services are a long-term task. Short-term task is provision of specific advice. The term of their provision is planned immediately after receiving a question from the client, when the complexity of the consultation is assessed.

Scrum is a well-known flexible method, a kind of agile subtype. The structure of the scrum is quite rigid. There is a set of approaches to project implementation that work together more effectively than individually. The format of this method allows you to receive the next version of the product more often, provide regular feedback and quickly refine the product, improving the process.

The method directs all participants in the project to active interaction and interchangeability. If one of the team members is unable to do their job, it is immediately picked up by another, not allowing the project to stand still. Responsibility for project implementation is collective. That is why decisions based on this method are made collectively. No one can push and force another decision if the team is sure they have settled on the right one.

Kanban is a less structured approach compared to scrum. This is not a template for the project implementation process, but a model where changes are implemented through continuous improvement. Kanban can be applied to any project already running. According to this system, the work is organized with the help of a kanban board, where the team writes what they plan to do, what is at work, and what has already been done. This is in the most general terms. Quite often such boards are used by audit firms when many projects are performed at the same time or when one project contains many tasks that require enhanced control.

According to this method the whole team is one. The business process is not divided into universal sprints, but at the stage of performing individual tasks – “planned”, “performed”, “checked”, “being processed”, “completed” and so on.

In audit firms, such a management method can be applied when performing large network projects. For example, the transformation of the financial statements of an enterprise with an extensive number of branches in Ukraine. Thanks to constant meetings, transparency of processes and opportunities for self-organization, employees come together and show a sincere interest in doing their job.