Audit Finding

What is an Audit Finding?

An audit finding is a documented observation made during an internal or external audit that identifies a gap, deficiency, or deviation from expected policies, procedures, controls, or compliance requirements. Audit findings highlight areas where an organization’s practices may expose it to risk, inefficiency, or regulatory non-compliance.

These findings form the basis for corrective actions and continuous improvement, making them essential to effective governance and risk management.

Why Audit Findings Matter

Audit findings provide actionable insights that help organizations:

  • Detect and correct compliance gaps

  • Improve internal control effectiveness

  • Reduce operational and financial risk

  • Support regulatory reporting and accountability

  • Strengthen trust with stakeholders, boards, and regulators

By addressing findings promptly, organizations can avoid reputational damage, fines, and repeat audit issues.

Types of Audit Findings

Audit findings can vary in severity, impact, and urgency, and are commonly categorized as:

1. Significant or High-Risk Findings

Indicate serious control failures or legal/regulatory violations that require immediate corrective action.

2. Moderate Findings

Represent gaps or inconsistencies in processes or documentation that could become risks if not addressed.

3. Low-Risk or Informational Findings

Refer to best practice recommendations or minor process improvements with limited immediate risk.

Typical Audit Finding Components

Each finding typically includes:

  • Observation: What the auditor discovered

  • Criteria: The policy, control, or regulation the issue violates

  • Cause: Why the issue occurred (e.g., process failure, lack of training)

  • Effect: The impact or potential consequence of the issue

  • Recommendation: Suggested corrective or preventive actions

Audit Findings in GRC Programs

Within a Governance, Risk, and Compliance (GRC) framework, audit findings serve as:

  • Key inputs for risk assessments

  • Evidence for compliance reporting

  • Drivers of policy updates and training

  • Triggers for remediation workflows

Many organizations use GRC software to manage audit findings, assign ownership, set due dates, and track resolution status with full audit trails.

Best Practices for Managing Audit Findings

  • Classify findings by severity and risk level

  • Assign owners and timelines for resolution

  • Document and monitor corrective actions

  • Use root cause analysis to prevent recurrence

  • Report progress to leadership and audit committees

Regular follow-ups help close the loop and demonstrate ongoing compliance improvement.

An audit finding is not just a problem—it’s an opportunity. It highlights where controls, processes, or behaviors need strengthening. When handled properly, audit findings support a culture of accountability, risk awareness, and regulatory readiness.

In the context of compliance and GRC, managing audit findings effectively is essential for long-term resilience, trust, and performance.