A list of
information requests (LIR) is method to establish common understanding with
audit client: what documents need to be prepared in order to progress with
audit. The LIR also known in different audit firms as list of outstanding
items, client assistance schedule, prepared by client (PBC) list. LIR is one of
the project management tools when auditors track if all required information
was provided in appropriate quality and on time.
In theory LIR
needs to be very specific and at least have following characteristics: detailed
description of the request (e.g. it should mention specific account in trial
balance), auditor and client employee responsible for request processing, date
when information due, format and if applicable prior year example.
I can give following
tips on managing LIRs:
- I advise to use Excel in managing LIRs;
- The level of details in LIR depends on client: when client is difficult to manage, it might be better to add some more details to be always ready to answer specific questions;
- The request should be ideally sent 2-3 weeks before start of the engagement, depending on the timing of audit procedures;
- The auditor must meet and discuss LIR with client representative in charge of the audit after sending the first version of LIR. The protocols of communication would depend on arrangements with client: e.g. the client might prefer the auditors to work directly with each responsible person in LIR;
- LIR should be compared with status of audit work at list once a week. I would propose following formula: information received – information processed = unprocessed audit evidence. If there is a lot of unprocessed evidence then it raises questions if audit team have issues with adequate staffing in terms of time and skills of team members.
- LIR should be designed in the way to be able to support audit teams in calculating overruns and defend auditors’ position. This could be achieved by updating LIR once a week, calculating number of days/hours from the due date to current date.
- Regular LIR status calls with client should be organised. All audit team members should participate being ready to provide an update on their section of Audit.
