Outsourcing your internal audit function

Posted by Zehra Maccawala on March 26th, 2021

Conventionally, the internal audit function is manned with an in-house team. However, over time this practice has been reformed and many organisations are looking towards outsourcing their internal audit function, either fully outsourcing or co-sourcing it.

Modern internal auditing requires a wide variety of technical skills to provide an effective assurance to the management of your organizations. Such skilled talent is difficult to source. Hence, outsourcing seems like a good option. When it comes to off-shoring, India is considered to be very rich in talent towards services like audit and assurance.

Keeping in mind the above need to outsource, companies may still want to weigh between pros and cons of outsourcing their internal audit function. The following are advantages of outsourced internal audit team as compared to having an in-house team:

1. It is considered more independent and objective
2. It eliminates the hassles of sourcing and retaining talent
3. It reduced cost towards: recruitment, training and development
4. It standardizes the audit methodologies and systems across the organization
5. It helps in better management of time and resources and improved productivity
6. It facilitates application of combined experience and best practices from multiple industries
7. It is driven by value-addition instead of just a compliance activity
8. It focuses on all business processes instead of just reviewing the accounting function

Further, it helps in huge cost savings towards the overall cost of audit if outsourced to countries like India due to the lower cost of living. This Covid-19 pandemic calls for some drastic cost reduction efforts, and internal audits of your processes can make important contributions to the same.

“But it should not be compliance simply for compliance sake. Internal audit should consider the overarching business objective and the controls that help mitigate risk to the achievement of the objective – even when examining compliance-related controls.” - Quote from Internal Auditor Magazine published by The IIA.

First published on https://www.linkedin.com/pulse/outsourcing-your-internal-audit-function-zehra-maccawala/