By necessity internal auditing has to be independent and objective to achieve its goal of making your business more efficient. While there is a clear need for internal audit, you need to decide whether to create your own internal audit function or use the services of an external consultancy.
For the typical small and medium-sized enterprise, there are clear benefits to outsourcing:
- You can focus your attention on your core business activities – the activities that make you money.
- You will find it easier to buy in the services of an expert than it is to recruit and employ an expert.
- Specialist consultancy firms can give you the range of skills that you won’t find in one person. For example, you may not only need an accountant but also an information technology, fraud or human resources expert.
- When you employ a specialist you create a reliance on that person. When that person leaves, you suffer disruption to your business while you try to replace that expertise. This is not an issue when you outsource as each consultant works to a common process.
- Employing someone with the experience and qualifications to perform an internal audit role is expensive. If you try to recruit cheaply you will get someone who is poorly qualified; this may cost you in the future. There is a clear cost-benefit argument for outsourcing.
- When you outsource you ensure independence and objectivity.
- You can monitor easily your relationship with your consultant through confidentiality and service-level agreements.
More so, outsourcing the internal audit function is in line with the IIA standards