Internal audits are critical to a company’s organizational processes and are typically a mandatory requirement. These audits serve to review the internal processes and controls within a company. They also ensure the company’s books and financial systems are managed seamlessly. Additionally, internal audits help identify possible loopholes within these systems and recommend the proper solutions for sealing them.
Because internal audits are vital for a company’s operations, most companies use them as a seamless procedure for internal control. Again internal and external audits differ in several ways. For instance, internal audits typically comprise a company’s in-house employees or outsourced professionals called internal audit outsourcing. This article highlights everything you need to know about internal audit outsourcing and how an internal auditing company Accume Partners can help you with the ideal internal auditing solutions.
Understanding Internal Audit Outsourcing
Internal audit outsourcing generally entails using a third party or outside company to handle internal processes. It’s the process of enlisting the auditing services of independent professionals who are not necessarily the company’s employees. However, these professionals can still work as a company’s in-house team. For most large companies, having an in-house internal auditing team is always a better option. Most internal auditors are licensed professionals under an authoritative body. Still, it’s expensive to hire and retain a professional and experienced internal auditing team. Nevertheless, these professionals play a critical role within a company, ensuring that its internal controls and operations are as effective and efficiently managed as possible. There are many different types of internal audit functions, namely:
- Full Outsourcing: This entails hiring an external provider to oversee the entire internal auditing function. This could be an independent public accounting firm that’s different from your company’s external auditor
- Partial Outsourcing: This involves delegating a substantial part of your internal auditing services to a third party
- Co-sourcing: Where all the internal auditing services are handled by both the in-house auditing team and an external third-party services provider. This provider should be an established accounting firm and not necessarily the company’s auditor. You can opt for this type of outsourcing if your company experiences a staff shortage or needs to meet specific deadlines or handle complicated projects that require unique expertise. It also applies when you need to cover the most remote business locations when specialized skills are scarce, when you need to adopt a new technology or when you’re required to review specific compliance requirements with professional bodies such as GDPR or Sarbanes-Oxley.
- Subcontracting: This applies when you subcontract specific short-term projects to a third party.
Why You Should Outsource Your Internal Audit Functions
You may have directed or managed many internal audits for many years. However, even with such vast experience, the process may overwhelm your in-house team. For example, you may need to bring in new strategies or reinforcement as efficiently as possible. Or you may want to update or streamline your existing processes with professional input and insights from a third-party auditing team. Whatever your reasons, sometimes outsourcing is the best strategy to employ to restructure your internal audits.
Advantages Of Internal Audit Outsourcing
There are many advantages internal audit outsourcing can bring to your company. For instance, you may understand the importance of mitigating potential risks and ensuring sustainable compliance. Additionally, your company may have limited specialized resources such as loss or lack of talented staff in information security, compliance, or auditing departments. As such, outsourcing your internal audits comes with multiple benefits such as:
Your company may benefit tremendously from specialized skills from outsourced professional auditors. While large companies may have the required capacity to onboard an in-house internal auditing team, the same may not be possible with smaller firms. Therefore, your company stands to gain immensely from the expertise an outsourced internal auditor brings to your company.
Organizations that use internal auditing processes must pass through various stages to implement and establish them. From developing the structure to onboarding new employees to planning the strategies etc., these steps take time to complete. However, with an outsourced internal audit function, the process takes less time. This approach also brings an established internal audits department, thus saving the company the time and money of establishing the same.
As already mentioned, internal audit outsourcing can bring needed expertise to a company while also cutting time. As a result, this helps save costs. Furthermore, internal audit outsourcing functions tend to have a fixed price, making it easier to budget for such an arrangement. Otherwise, your company will need to add bonuses and allowances on top of the salaries you pay your in-house team.
Factors To Consider When Selecting An Internal Audit Outsourcing Partner
If you’ve never worked with a third-party internal audit outsourcing team, consider the following factors and considerations necessary to inform your choices. An internal audit outsourcing:
- Should be able to follow your company’s professional standards of work
- Should be able to retain your company’s processes and requirements, thereby eliminating the need for repeat orientations or backtracking for future engagements
- Must understand your company’s structure and policies and work within them
- Should be able to offer advisory insights to the auditing committee and top leadership
- Follows all compliance regulations and offers relevant updates on the same.
- Must be able to maintain good standing with relevant professional organizations.
- Must be able to offer relevant insights into internal auditing best practices
- Should be able to help your organization streamline all auditing processes and improve functionality
- Should be able to impart auditing tips and advice to your in-house auditing staff( if you have any) through scheduled training
How Accume Partners Can Help With Your Internal Audits
Whether your company is experiencing staff shortage and need to outsource or co-source your internal audit functions, our professional and dedicated team at Accume Partners is here, ready and eager to help out. We offer the necessary expertise and professionalism to conduct highly effective and efficient internal audit services to boost your business processes, mitigate risks and maintain compliance requirements. Simply put, Accume Partners can help your company by:
- Offering expert services at competitive rates to help your company cut costs
- Providing expert internal auditing functions with a critical focus on cybersecurity and IT
- Providing flexible services with a focus on your organizational needs
- Providing professional guidance on emerging technology trends and potential threats.