Conducting Internal Audit
Quality Assessments – Best
Practices
Angela M. Poole, CPA, CGFM
Associate Vice President, Finance and Administration
Florida A&M University
Agenda
• Become familiar with IIA Standards related to a Quality
Assurance and Improvement Program
• Discuss the IIA Framework for Quality (Path to Quality
Model)
• Discuss the benefits of conducting quality assessments
• Review a best practice – State of Texas IIA Study
“Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction and skillful execution; it represents the wise choice of many alternatives”. – William A. Foster, Igniting the
Spirit at Work: Daily Reflections
How to you define quality?
Achieving Quality
Can Be Impacted By:
• Organization’s
• Acceptance
• Goals/Objectives
• Mission
• Tenaciousness
• Temperament / Appetite
• Chief Audit Executive’s professionalism, commitment and
diligence
• The Quality Assurance and Improvement Program (QAIP)
• Audit Staff’s Commitment
• Audit Customers Understanding
QAIP
• A Quality Assurance and Improvement Program (QAIP)
enables an evaluation of the internal audit activity's conformance with the Definition of Internal Auditing and the International Standards for the Professional Practice of Internal Auditing (Standards) and an evaluation of whether internal auditors apply the Code of Ethics.
• The program also assesses the efficiency and
effectiveness of the internal audit activity and identifies opportunities for improvement.
Official IIA Definition of Internal Auditing
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INPUTS
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OUTPUTS
IIA Standards which support the inputs of internal assessments
IIA standards which support the outputs of internal assessments
All internal audit activities, regardless of industry, sector, or size of audit staff — even those outsourced or co-sourced
— must maintain a QAIP that contains both internal and external assessments. Where do you look for resources in conducting a QAIP?
Conducting QAIPs
Additional Resources
QAIP Process
• Completing a series of checklists, interviews,
observations, and file reviews to ascertain the quality of:
• IA Governance
• IA Staff
• IA Management
• IA Processes
External vs. Internal Assessments
External Assessments
Internal Assessments
• External assessments enhance
value, as they enable the internal audit activity to independently evaluate conformance with the
Standards;
• Must be completed at least every five years by an independent reviewer or review team to maintain conformance with the
Standards.
• Internal assessments are
ongoing, internal evaluations of the internal audit activity, coupled with periodic selfassessments and/or reviews.
Approaches for Conducting QAs
• Independent Assessment Team—The first approach
involves an independent, external team led by a professional and experienced project manager.
• Independent Evaluator—The second approach (and the
less expensive of the two options) involves an independent, internal evaluator
How should internal quality assessment programs be structured?
A formal internal quality assessment program can be structured to combine the following options:
• Perform or “real-time” assessment of audits as they are underway.
• Perform a “look-back” of a percentage of the audits completed during
the course of the year and use set criteria to evaluate the quality, documentation, and compliance of the completed audits versus the published methodology.
Who performs the internal quality assessments? • The CAE/internal audit director generally determines who will be
responsible for performing the quality assessments and whether they will be handled internally—led by the internal audit professional practice team—or supported through outsourcing.
• Internal audit management must consider factors to determine if the
work will be handled internally, by a third party, or as a joint internal/external effort:
• Size of the audit department,
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