What type of entity is typically included in an audit universe?

The audit universe encompasses all areas that can be subject to auditing, which includes operational, financial, and compliance sectors. Creating an audit universe is essential for identifying the full range of processes, events, risks, and entities that may need to be evaluated in order to assess the effectiveness of internal controls and overall governance.

This inclusive approach allows auditors to ensure that they are considering all relevant risks and operational aspects, rather than limiting their focus to specific departments or areas that may have previously encountered issues. It also enables a proactive audit function that can identify potential problems before they escalate and ensures comprehensive coverage of the organization's operations, which is crucial for effective risk management.

By involving all areas within the organization, auditors will have a clear understanding of where resources may be best allocated and which processes require scrutiny to promote accountability and foster continuous improvement throughout the organization.