Internal Audit gives the assurance that the controls and processes are working in the manner intended. However, this assurance should also be applied on the Internal Audit function for the Owners, and Audit Committee to ensure that their certifying agent is also working as intended. It is important that the stakeholders identify the necessity for such a step and extend its resources to achieve the same.
It is time that these risks are also addressed in organizations with a perspective for re-alignment.
What can go wrong?
- Lack of effective coverage of risks
- Lack of sustained application of test of controls
- Lack of application of substantive testing
- Lack of identifying opportunities for synergic application of controls from other industries for adding value.
- Lack of application of necessary industrial and operational knowledge for executing audit assessments.
- Lack of value addition from Internal Audit activity
- High cost of audit activity
- Lack of quality in Audit process
- Lack of expertise to see through lapses in existing controls
- Lack of cost reduction recommendations
- Overlooking revenue enhancement potentials
- Lack of professional approach to audit implementation
- Lack of required skillsets for integrated risk review from Accounting, Operational, IT, and HR perspectives.
- Delay in reporting process
Affility provides organizations having in-house internal audit departments an independent Quality Assessment Review of their Internal Audit Function. This is bound to add value to the stakeholders as Affility Auditors assess the functioning of internal audit departments under various models of structuring. They apply the necessary knowledge, skills, and operational understanding for the specific industry to conduct an efficient review of the internal audit department’s functioning.
Focus Areas of Internal Audit Assessment and Re-engineering
- Internal Audit Process Methodology
- Organizations coverage GAPS (Risks and controls)
- Review of Working papers from audit activity
- Quality of observations
- Quality of recommendations
- KPI’s monitored
- Skills applied in the function
- Challenges faced in executing audit function
- Standards followed
- Effectiveness of implementation recommendations
- Internal Audit tools— Audit Programs, ICQ’s etc.
- Personnel attitude and aptitude
- Cost—Benefit assessment
- Audit strength sufficiency
- Audit Staff productivity