The Wayside Network

Quality reviews and health checks on internal audit effectiveness

The issue

• Audit Committees are required to evaluate the effectiveness of the organisation's internal audit provision. The Turnbull Guidance, incorporated within the Combined Code, requires an annual review of the authority, resources and scope of work of internal audit.
• The Code recommends the Professional Practices Framework of the Institute of Internal Auditors (IIA) as an appropriate standard for evaluation.
• The IIA Standards themselves explicitly require external assessments of internal audit at least once every five years by a qualified, independent reviewer or review team from outside the organisation.

What this means to you
This means that Audit Committees need to review the structure and operation of internal audit each year. Does its performance show that the service is delivering sufficient assurance - over risks in every part of the organisation and over the risk management process itself? For your comfort you need the right information from internal audit. And at least once every five years internal appraisal needs to be underpinned by careful scrutiny from independent and objective assessors who know what best practice internal audit looks like.

What we will give you
We will deliver a succinct written report to the Audit Committee based on an in-depth review of the internal audit function judged against the Combined Code requirements, IIA standards and examples of best practice. The report will include a plan with timescales to implement any agreed actions to improve the performance or processes of the internal audit function. We will also provide the Head of Internal Audit with a face to face feedback session with detailed recommendations and expert advice.