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  • Sally-Anne Pitt

Setting the Scene for Internal Audit Quality

Internal auditors rely on their reputation to influence positive change within organisations. They must be seen as credible, trustworthy and strategic. Unless internal audit has a reputation for quality it is unlikely to garner the support and respect needed for its role as a critical friend to senior management.

Chief audit executives are responsible for internal audit quality and should develop a quality assurance and improvement program to meet management and audit committee expectations. These quality programs are consistent with Total Quality Management (TQM) approaches and, similarly to ISO 9000, should incorporate an independent assurance element.

Viewed from an internal audit lens, operational managers are expected to ascertain the quality and effectiveness of their operations prior to internal audit providing independent assurance. Good managers do not wait for internal auditors to arrive before they start measuring their performance. Ideally, internal auditors should find that managers are operating effectively and have managed their key risks appropriately.

So, too, should the internal audit activity measure its own quality. Chief audit executives should be familiar with their operations and have a comprehensive understanding of what management and the audit committee expect from internal audit. They should monitor quality in their daily activities through standardized procedures built on professional standards, effective oversight, and periodic assessment of these processes.

From time to time, the internal audit activity should undertake “health checks” of its operations. These periodic assessments examine the appropriateness and adequacy of policies and procedures, and the extent to which embedded quality processes are supporting the internal audit function to deliver value to the broader organization.

Similar to the way in which internal audit provides independent assurance, chief audit executives should also receive an impartial review of the quality of their operations through an external assessment. This can be conducted fully by an external reviewer or can utilise a hybrid model, with an external reviewer validating a self-assessment by the chief audit executive.

Measuring quality is something internal auditors should do on an ongoing basis. Although periodic health checks and external assessments are extremely valuable, unless quality is part of everyday tasks, the internal audit activity will need to continuously retrofit outputs to meet quality standards.

Further information regarding internal audit quality is available in Internal Audit Quality: Developing a Quality Assurance and Improvement Program, Wiley (2014).

Internal auditors rely on their reputation to influence positive change within organisations. They must be seen as credible, trustworthy and strategic. Unless internal audit has a reputation for quality it is unlikely to garner the support and respect needed for its role as a critical friend to senior management.

Chief audit executives are responsible for internal audit quality and should develop a quality assurance and improvement program to meet management and audit committee expectations. These quality programs are consistent with Total Quality Management (TQM) approaches and, similarly to ISO 9000, should incorporate an independent assurance element.

Viewed from an internal audit lens, operational managers are expected to ascertain the quality and effectiveness of their operations prior to internal audit providing independent assurance. Good managers do not wait for internal auditors to arrive before they start measuring their performance. Ideally, internal auditors should find that managers are operating effectively and have managed their key risks appropriately.

So, too, should the internal audit activity measure its own quality. Chief audit executives should be familiar with their operations and have a comprehensive understanding of what management and the audit committee expect from internal audit. They should monitor quality in their daily activities through standardized procedures built on professional standards, effective oversight, and periodic assessment of these processes.

From time to time, the internal audit activity should undertake “health checks” of its operations. These periodic assessments examine the appropriateness and adequacy of policies and procedures, and the extent to which embedded quality processes are supporting the internal audit function to deliver value to the broader organization.

Similar to the way in which internal audit provides independent assurance, chief audit executives should also receive an impartial review of the quality of their operations through an external assessment. This can be conducted fully by an external reviewer or can utilise a hybrid model, with an external reviewer validating a self-assessment by the chief audit executive.

Measuring quality is something internal auditors should do on an ongoing basis. Although periodic health checks and external assessments are extremely valuable, unless quality is part of everyday tasks, the internal audit activity will need to continuously retrofit outputs to meet quality standards.

Further information regarding internal audit quality is available in Internal Audit Quality: Developing a Quality Assurance and Improvement Program, Wiley (2014).


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