Client situation
In response to an increased focus on effective governance, the Institute of Internal Auditors (IIA) issued two key provisions to revise standards for the practice of internal audit in 2002. Of the two provisions, the external quality assurance review (QAR) is considered to be particularly important, reflecting the enhanced role played by internal audit departments in the risk, control and governance activities of many major corporations today. By January 1, 2007, the deadline for IIA compliance, most large companies will have completed extensive external assessments. However, is the strategic potential of this effort being fully utilized by the organizations undertaking these procedures?
PricewaterhouseCoopers' perspective
Regulatory changes have placed increased demands on internal auditing departments. Quality assurance reviews provide an excellent opportunity for internal audit departments to offer greater value to their organizations and better quality assurance. But to achieve such benefits, the chief audit executive must commit to emphasizing quality assurance and improvement in the process. In our experience, this can be achieved with a well-organized, multi-step approach that focuses on establishing a stronger link between the strategic focus of internal audit and the value drivers of its key stakeholders.
Implications
The path to enhanced strategic performance requires the chief audit executive and the internal audit department to undertake an integrated set of strategies and tactics that go well beyond adoption of and compliance with IIA standards. A stronger strategic contribution from internal audit to the objectives of the organization can be achieved by:
- Making an up-front commitment to quality
- Conducting a sound quality assurance program
- Establishing forward-thinking protocols
- Conducting an external review with integrated benchmarking
- Implementing corrective actions as necessary
- By continuously assessing the performance of the internal audit function
Learn more about the situation and PricewaterhouseCoopers' perspective on how to leverage a quality assurance review (QAR) at a strategic level.
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quality assurance review (QAR) whitepaper. (749kb)
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