Internal audit effectiveness – an independent assessment

‘The chief audit executive must develop and maintain a quality assurance and improvement programme that covers all aspects of the internal audit activity.

Interpretation:
A quality assurance and improvement programme is designed to enable an evaluation of the internal audit activity’s conformance with the definition of internal auditing, the standards and an evaluation of whether internal auditors apply the code of ethics.

The programme also assesses the efficiency and effectiveness of the internal audit activity and identifies opportunities for improvement’

IIA – International Standards for the Profession of Internal Auditing

 

Whilst internal audit functions will typically have robust quality review and improvement processes in place, to provide assurance over their working practices and deliverables, the International Standards for the Profession of Internal Auditing recommend that a periodic external assessment of the function should also be carried out. Such an assessment can take the form of reviews of certain elements of the function, or a review of the function overall. The scope and approach for the review, and expected deliverables, will always be agreed with the audit committee to ensure it meets their quality and assurance needs.

We carry out our reviews as follows:

The KCG internal audit effectiveness review is an independent and objective assessment of the processes and practices within the internal audit function to determine whether it delivers what the business needs, and whether there is general and specific conformance to the international standards. We have developed a five part internal audit scorecard to carry out the assessment; this enables us to provide a broad based and balanced assessment whether the internal audit function is fit for purpose, that it is meeting the assurance needs of the audit committee, and is therefore delivering value for money to the organisation and it’s wider stakeholders.

Our methodology

Planning
We will engage with the key stakeholders, including the Audit Committee, Vice-Chancellor and Director of Finance to define the scope and agree the overall objective for the review. In doing so, we will develop an understanding of the institution, its key business processes, the risk management process and how internal audit interfaces with it.

At the conclusion of the planning process we will draft terms of reference for the review. This will set out the outline approach, timetable and deliverables. We will also identify key KCG staff who will be engaged in the review, and the names of your senior executives, internal audit staff, and board/audit committee members who will be interviewed.

Fieldwork
Our structured approach to carrying out the internal audit assessment is built around the internal audit scorecard. The following diagram outlines the key components of our approach:

Internal audit scorecard diagram

What you can expect:

Our internal audit effectiveness review service is led by highly experienced internal audit and risk advisory practitioners who have extensive experience of delivering internal audit services and of acting as head of internal audit for a diverse range of organisations.

The key features of our internal audit effectiveness review service are:

  • We will work collaboratively with you to define the review objectives and scope. The review will be tailored to your specific context
  • Our team has extensive experience of working with a variety organisations and can therefore help you develop best practice arrangements.

The internal audit balanced scorecard:

The internal audit balanced scorecard