How is internal audit performance evaluated?
How is internal audit performance evaluated?
The performance of internal audit about the evaluation of the effectiveness of internal audit, the four parts of internal audit, four basic questions are raised as follows:
- Does internal audit have clear and documented goals?
- Does the achievement of these goals help the organization to achieve its goals, that is, it leads to the establishment and implementation of the internal control system?
- Is the internal audit work planned, executed and resourced in such a way as to enable the achievement of the objectives?
- Does the internal audit reach its predetermined goals?
Modern goals: The answer to the first question should not be so difficult;
Because, there must be documents about this. These documents must contain the set goals.
For example, preparing a draft report within one month from the date of completion of the internal audit work.
- Achieving organizational goals: Assuming the correct and complete definition of internal audit goals,
The second question can be answered by evaluating the coverage of internal audit cycles in relation to the activities of the organization.
These audit cycles should cover all the organization’s activities and pay attention to high-risk areas.
- Information and internal audit process: The review unit should pay attention to this issue to find the answer to the third question.
that the internal audit has done its work based on the system and has followed the professional standards.
Such reviews are usually the duties of the quality control department of the competent legal authorities or peer review by external professional persons.
The non-executive review unit may also want to ensure that such reviews are carried out.
- Achieving objectives: The effort to achieve objectives alone does not provide an answer to the fourth question about the effectiveness of internal audit.
This effort can only express the probability of achieving the goals.
Therefore, those who want to evaluate the performance of internal audit should act very carefully.
The mere implementation of the internal audit program is not a guarantee of its effectiveness.
In other words, the mere discovery of abuses, weaknesses, or savings cannot be considered as a criterion for the effectiveness of internal audit.
Because there may not be anything to be discovered in the unit under consideration.
In addition, the presence of effective internal audit may have a restraining effect that cannot be expressed quantitatively.
The effectiveness of internal audit can be evaluated according to the quality of the findings and suggestions.
Sabkar’s reaction can also be considered an important indicator.
These two factors can be evaluated as follows:
- Determining the extent to which major internal audit recommendations have been implemented within a reasonable period of time.
- Realization of the employer
- Ensuring the quality control of internal audit work regularly.
The way of carrying out such checks must be carefully specified.
And it can be done by the audit manager or independent experts and consultants.