A successful enterprise is the one that is on a constant lookout for improvements in its operations, thus adding value to the firm. While majority of the companies strive for excellence, there are numerous others that remain stagnant for year or decades. What they lack is a systematic, disciplined approach, that can be made possible with an effectual internal audit team.
Internal auditing is an independent, objective assurance and consulting activity designed to add value and enhance an organization’s operations. It helps in evaluating and improving the effectiveness of risk management, control and governance processes.
Internal auditing sector has witnessed a massive growth in the last few years – the function has evolved from being a department responsible for conventional audits to a strategic partner that acts as the backbone of a business. Today, internal auditing is no less than a powerful tool that has the potential to shape the future of an organization.
Responsibilities of an internal auditor
- Offer insight and advice
- Evaluate risks
- Assess controls
- Ensure accuracy
- Improve operations
- Promote ethics
- Monitor compliance
- Review processes and procedures
- Assure safeguards
- Investigate fraud
- Communicate results
Maintaining an in-house internal audit team may not be a feasible option for majority of the companies. Attracting and retaining highly skilled internal auditors is a huge challenge in today’s competitive era. There are also possibilities of bias and internal conflicts that could arise in the long term. When you can get truly professional expert service at relatively lower costs, why would you say no to an outsourcing firm?
Advantages of Outsourcing Internal Audit
Reduces cost and time
The cost of in-house Internal Audit employees is usually higher than what an outsourcing company would charge. Outsourcing helps you lower cost, along with giving employees ample time to focus on the core activities of their business.
An external party can better analyse the performance of a company, compared to employees within the firm. There are nil chances for conflict, ego and competition, and the results are, novel ideas & proposals for enhanced performance and alleviation of risks & control.
Imparting industry best practice
Independent consultants are better aware of issues, be it industry specific or general. Having worked in the field for years for numerous companies, they have an upper hand in analyzing and solving issues.
A good team of outsourced internal auditors come with various skill sets. The team will have domain experts in Finance, Operations, Human Resources, IT and even Strategy. Such a diverse portfolio of skills is usually rare to find in a relatively smaller internal team.
An internal audit team within the organization might feel less empowered, as the possibility of management brushing off their views are pretty high. Whereas, outsourcing opens the door to independence.
If you are looking for a fair and unbiased approach that lets you accomplish your business objectives, then think no further – outsourcing your internal audit / compliance function is what will serve you best.