VALUE ASSESSMENT REVIEW (VAR) OF INTERNAL AUDIT
The IIA Board of Directors defines internal auditing as an autonomous and unbiased reassurance pursuit intended to add value and improve an organization’s end-to-end operations. Its primary objective is to help an organization realize its goals by implementing and executing a methodical, controlled approach to evaluate and enrich the effectiveness of its risk management, operational, and governance processes.
Why do you need to pursue a Value Assessment Review (VAR) of your internal audit function?
- The most common issue identified through our experience is the misalignment of stakeholder expectations with the policies of the internal audit function.
- Oftentimes, the audit function is not strategically positioned within a company, which then results in a mismatch of its objectives compared to the organizational goals.
- The internal audit function often gets confined to being a compliance review without adding any value to the organization.
- There is a lack of cross-industry experience within the internal audit function to test and implement new reforms that could bring a change in the organization’s growth.
- There is a lack of provision to enhance the skillset of the internal auditors in line with the updates and developments that occur in the organization’s industry.
In recent times, companies have been confronted with an assortment of new challenges, such as increasing economic volatility, rising stringency in regulatory requirements, and rapid technological innovations. Bearing this in mind, auditing should be considered an ever-evolving process and not just a one-off supervisory event. It is one of the core elements of a good corporate governance framework. Since the audit committee and management may not be able to inspect all governance-related activities and processes, they rely on internal auditing as an independent and objective support function. However, if internal auditing teams potentially focus only on familiar processes and controls, this can often lead to sluggishness and allow discrepancies to creep in eventually. Therefore, it is paramount for organizations to have a periodic assessment of their internal audit function by external experts to ensure their long-term and sustainable success.
With Affility’s Value Assessment Review (VAR) of Internal Audit Function, we extend our internal audit function for business owners and internal audit teams to assure all stakeholders and certifying agents that their internal audit function is operating as intended.
Here are some of the considerations of internal audits that we keep in mind:
- Internal auditing should aim to improve the corporate governance framework and governance processes.
- It should help improve the overall performance of the company.
- It should not look at internal auditors as competitors, but as collaborators with the same ulterior motives.
- The audit function should support the detection of risks and fraud at all levels of the organization.
- It should develop advocates within the organization who will support and enhance the audit function on a continuous basis.
Our VAR of Internal Audit Function service addresses all of the above and allows our clients to address risks with an early warning sign to allow for effective re-alignment of processes and policies if required. An efficient review of the internal audit department’s functioning ensures that the internal audit controls and processes are working as desired at all times. We consider quantitative and qualitative factors as part of our VAR services, which ensures that you get a holistic view of the audit charter, policies, and procedures of your company with respect to the value that they are adding to the organization.
At Affility, we:
- Offer an independent assessment review of in-house internal audit departments.
- Align your audit function with the expectations of your stakeholders.
- Provide an optimization advantage for all internal audit controls and processes.
- Assess the performance of internal audit departments across all business units.
- Provide you with a platform to assess the skills of your auditors and enhance their knowledge in the right areas.
- Present you with futuristic solutions that will add greater value to your organization.
In addition to the above, we are keen to explore the role of how value-addition to internal audit can be increased through digitalization and automation, which can bring about stimulating changes in your operational processes and the auditing function.
Overall, the following are the steps that we follow:
- Discuss and define the expectations from the internal audit function with key stakeholders.
- Review if the internal audit function objectives are in alignment with organizational goals.
- Create a measurement model for the internal audit function along with the right set of tools and techniques to evaluate its performance.
- Report the findings and develop a roadmap to address any gaps.
- Communicate the changes and/or improvements that need to be implemented in the internal audit function to align the same to organizational goals while improving its effectiveness and efficiency.
- Review and refine the process periodically to ensure continuous improvement.
At Affility, we believe in making your internal audit function a proactive value driver, instead of simply adopting a reactive approach towards the organization risk management.
If you think your Internal Audit function could benefit from a Value Assessment Review (VAR), send us a Quick Enquiry