09 Jun Do Organisation need Audit Quality Assessments?
The Institute of Internal Auditors (IIA) defines internal auditing as “An independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes’’.
A quality assurance program to evaluate the quality of the internal audit activity and make recommendations for improvements is critical whether in small or big audit firms. This is in line with the mandatory requirement established by the International Standards for the Professional Practice of Internal Auditing (1300 series) that the internal audit activity must have in place a quality assurance and improvement program (QAIP). External stakeholders, including external auditors, regulators in addition internal stakeholders like the Boards of Directors, Audit Committees, senior management and operational managers, are also placing increased emphasis and reliance on the results of quality assessments to gain further insights into the quality of the audits performed by internal auditors.
The Quality Assurance and Improvement Program for the internal audit function should include both Internal and External Assessments. Internal assessments should include both ongoing monitoring and periodic self-assessment. External assessments may be either a full external assessment or a self-assessment with independent validation.
Delivering quality Internal Audit services requires a systematic and disciplined approach from the audit professionals. It is in practice the combination of the right people, the right systems, and a commitment to excellence. By putting in place more formal quality assessment programs, the internal audit function of any size is able to self- evaluate how audits are being executed, determine if gaps exist in the process and identify process improvements.
After the successful implementation of the Quality Assurance and Improvement Program for the internal audit function, it can be said that it provides objective and relevant assurance and adds value by contributing to the efficiency and effectiveness of corporate governance, risk management and the internal control system.
By following the Quality Assurance and Improvement Program, Internal Audit will have the opportunity to:
- Gain added credibility with the Audit Committee and Executive Management
- Show leadership in the Internal Audit profession
- Leverage off a positive marketing opportunity for Internal Audit
- Show professionalism and conformance to the Internal Audit Standards
- Identify opportunities for improvements within Internal Audit Function
- Prove Internal Audit’s worth to its customers
Konstantinos P. Triantafyllidis
CIA, CFSA, CCSA, CFE, Accredited Valuator in Quality Assessment by the International Institute of Internal Auditors (The IIA)