1. Introduction to the Technique
A walkthrough is a foundational technique in internal audit fieldwork used to understand how a process works from start to finish. It involves tracing a transaction or process step-by-step, usually by observing and asking questions of process owners. Walkthroughs help internal auditors like Auren verify that documented procedures are followed in practice and identify any control gaps early in the audit. This method also builds rapport with teams and provides direct, practical insights into operational realities.
2. Template for Applying the Walkthrough Technique
A systematic walkthrough includes:
Select the Process: Choose a key process or control area to review.
Define Objectives: Understand what the walkthrough should confirm (e.g., control design, compliance).
Choose a Sample Transaction: Follow a real transaction or case through the full cycle.
Engage with Process Owners: Interview staff involved at each stage (e.g., data entry, approval, reconciliation).
Document Observations: Note steps, control points, deviations, and evidence reviewed.
Confirm Understanding: Reconfirm process flow with the team to ensure accuracy.
3. Practical Example: ACME’s Vendor Payment Process
At ACME Corp, CEO Liora has requested assurance over vendor payments, following concerns about delayed disbursements. Internal Auditor Auren selects the vendor payment process for a walkthrough. He coordinates with Project Manager Aven and the Accounts Payable team.
Step 1: Auren selects a recent high-value invoice for a raw material supplier.
Step 2: He starts with the Procurement Officer, who explains the purchase order creation.
Step 3: Then, he meets with Receiving to confirm goods receipt and system entry.
Step 4: In Accounts Payable, Auren observes the matching of PO, invoice, and receipt.
Step 5: Finally, the Finance Manager demonstrates the approval and payment release workflow.
Along the way, Auren notes that while the PO and invoice are electronically matched, the receiving documentation is still manually signed and scanned—causing delays and potential loss of paperwork.
Auren documents this weakness and recommends digitizing receiving reports. He includes screenshots of the system entries, email trails, and scanned documents as part of his audit evidence.
This walkthrough not only confirms process steps but also reveals improvement opportunities that help ACME enhance both efficiency and control effectiveness. When done thoroughly, walkthroughs become one of the most reliable techniques to bridge the gap between policy and practice.