Apr 2, 2014 Comments Off on Is your internal audit model giving you value?
The issue of out-sourcing, co-sourcing or in-house
As a CEO or Board member, do you ever ask yourself:
- Are we getting valuable information and insights from our investment in Internal Audit?
- Does our Internal Audit team have the skills and experience needed to address the risks in our business before they become a problem?
- How can we better manage internal audit costs?
- Is it possible to shift from a fixed to a more variable cost structure?
Today’s dynamic business environment requires internal auditors to have a strategic orientation and to provide value and insights beyond the traditional assurance and compliance perspective. For internal auditors to deliver on their mandate and meet the expectations of CEO’s and Boards, they need broader skill sets and the ability to add the most value and the flexibility to properly respond to changes caused by internal and external factors.
Questions to consider when you make your decision:
|Factors to consider in sourcing Internal Audit||Your in-house internal audit team||Outsourced/Co-sourced internal audit|
|Flexibility||You are understaffed during “crunch time”.||During peak periods, gain access to additional staff.|
|Multidisciplinary knowledge||The skills required to execute speciality audits may not reside in-house.||Access to depth and breadth to resources to bring the right mix of skills for each audit.|
|Insight||Staff may lack the methodology and tools to readily identify and mitigate risk.||Access to proven methodologies, tools and leading practices to help you gain a broader risk perspective.|
|Cost||In-house costs are fixed and may be difficult to retain.||Pay only for the resources you need and use.|
|Tools and methodologies||Staff may lack access to leading practices and automated tools.||Deloitte leverages the latest benchmarking and analytical tools.|
Ultimately, when considering different sourcing options, you should consider which model best addresses your organisation’s needs. As with all strategies, there is no “one size fits all” solution, as these will need to be tailored depending on your requirements. The underlying principle guiding organisations to re-evaluate internal audit functions is the need to enhance the value that internal auditors provide, and the fact that the internal audit function is increasingly becoming an advisor to the business and an example of leading practices. These are the principles which CEOs and Board members must demand from their internal auditors.
Director, Risk Advisory
Africa Leader – Governance, Risk and Oversight
Tel: +27(0) 11 209 6337
Partner, Risk Advisory
Tel: +27 (0)11 806 5395