The most effective internal audit quality assessment would be one that is conducted by an independent, external body. This would ensure that the assessment is objective and unbiased.
The assessment should cover all aspects of the internal audit function, including the quality of the planning, execution, and reporting. It should also assess the effectiveness of the internal audit function in assuring the organization.
The assessment should be conducted on a regular basis, and the results should be shared with the organization's management.
Performing an Effective Internal Audit Quality Assessment
By L. Kevin Chapman, CPA, CIA
According to The IIA’s International Standards for the Professional Practice of Internal Auditing, “The chief audit executive is responsible for leading and directing the internal audit activity, establishing a risk-based annual internal audit plan, and providing independent assurance to the board and executive management regarding the adequacy and effectiveness of the organization’s governance, risk management, and control processes.”
In its most basic form, the objective of the internal audit quality assessment is to ensure that the internal audit activity is adequately structured, resourced, and functioning in accordance with The IIA’s International Standards.
The audit quality assessment is conducted in two phases. Phase I is a self-assessment conducted by the internal audit activity and includes a review of the internal audit activity’s structure, charter, policies, and procedures. Phase II is the external audit quality assessment conducted by external quality assessors.
In performing a Phase II audit quality assessment, external quality assessors (EQAs) must:
Review the results of the self-assessment conducted by the internal audit activity
Complete an evaluation of the internal audit activity’s compliance with The II
Topics in this Blog Post:
• Answer common quality assessment questions using The IIA
• International Professional Practices Framework (IPPF) resources.
• Describe the Quality Assessment Manual process flow and its tools
• Contrast the three types of internal audit quality assessment.
*Planning the Quality Assessment
• Plan an internal quality assessment by implementing the QA Manual tools.
• Describe key features of planning guides.
• Apply the planning tools to a quality assessment.
• Describe key features of surveys.
• Analyze survey results.
*Performing the Quality Assessment
• Perform an internal quality assessment by implementing the QA Manual tools.
• Describe the key features of interview guides.
• Analyze interview results.
• Describe key features of QA programs.
• Analyze QA program results.
*Evaluating QA Results
• Evaluate an internal quality assessment by implementing the QA Manual tools
• Determine final ratings (evaluation results)
• Develop value-added solutions for common QA issues and opportunities
*Internal Quality Assessment Options
• Determine, or validate, the internal quality assurance option that will work best for your internal audit activity.
• Describe rationale for selecting the best internal QA option
• Discuss successful practices used by internal audit activities to get ready for an internal assessment
• Emerging Issues and Future Challenges
Manual and Process Overview for Effective Internal Audit Version 2.0 December 2012
1 National Internal Audit Quality Assessment Framework (NIAQAF) Manual and Process Overview for Effective Internal Audit Version 2.0 December 2012
Inspection and Audit Manual Inspection and Audit Manual . ... 3.1.1 Quality Assurance ... 6.1.3 Internal Auditors 6.2
Internal Audit Manual - City of Madison WI Internal Audit Manual ... Quality Assurance and Improvement Program ... and other internal audit activities. The manual covers the following topics:
Audit and Inspection Guide - US Department of Energy Audit and Inspection Guide . ... 1-2 Internal Audit Programs ... The audit may be a quality assurance or quality control self-assessment.
audit manual - Welcome to the University of Alabama at Birmingham Audit Manual Section 1 ... 4-1 Quality Assurance and Quality Control ... The audit process is an internal process that reviews an entity’s
Audit Manual - West Virginia Department of Education Audit Manual Table of Contents ... Auditor’s Quality Control and Quality
Answer common quality assessment questions using The IIA’s definition of quality
1. What are the objectives of the engagement?
The objectives of using The IIA’s definition of quality in a common quality assessment are to provide a common understanding of quality among assessors and to ensure that the assessment process is objective and fair.
2. What are the risks associated with the engagement?
The main risks associated with engagement in common quality assessment questions using The IIA’s definition of quality are:
1. There is a risk that the questions asked may not be relevant to the specific engagement being undertaken, and so the quality assessment may not be effective in identifying areas where improvements could be made.
2. There is a risk that the quality assessment process may be used to unfairly criticise or punish those who have done nothing wrong.
3. There is a risk that the quality assessment process may be used to protect the interests of those who are carrying out the assessment, rather than the interests of those being assessed.
3. What are the expected results of the engagement?
The expected results of the engagement in common quality assessment questions using The IIA’s definition of quality are improved audit quality and efficiency, and increased confidence in the audit process.
4. What is the expected value of the engagement?
The IIA’s definition of quality is the degree to which the engagement meets the requirements of the applicable professional standards. The expected value of the engagement in common quality assessment questions using this definition is therefore the degree to which the engagement meets the requirements of the applicable professional standards.
5. How will the results of the engagement be used?
The IIA's definition of quality is "a measure of the value of an engagement or its outcome in relation to its cost, purpose, and intended users." The results of the engagement will be used to answer common quality assessment questions, such as: Was the engagement performed with due professional care? Did the engagement team adhere to The IIA's International Standards for the Professional Practice of Internal Auditing? Did the engagement team collect sufficient, reliable evidence to support its conclusions?
6. What are the risks associated with not performing the engagement?
There is a risk that the engagement will not be performed in accordance with The IIA's definition of quality, which could result in the engagement not meeting the desired objectives. Additionally, not performing the engagement in common quality assessment questions using The IIA's definition of quality could also result in the engagement not being accepted by The IIA.
7. What are the risks associated with using the results of the engagement?
There are several risks associated with using the results of the engagement in common quality assessment questions using The IIA's definition of quality. First, the results may not be representative of the population of interest. Second, the results may be biased due to the way the questions were asked or the response options available. Finally, the results may not be reliable, meaning that they may not be consistent if the assessment is repeated.
International Professional Practices Framework (IPPF) resources in Effective Internal Audit Quality Assessment
The IIPF provides resources that can help organizations assess their internal audit quality, including the "Standards for the Professional Practice of Internal Auditing" and the "Internal Audit Quality Assessment Framework."
Describe the Quality Assessment Manual process flow and its tools in Effective Internal Audit Quality Assessment
The Quality Assessment Manual (QAM) is a tool used by The IIA to assess the quality of an organization's internal audit services. The QAM contains a set of standards and guidelines that are used to evaluate an organization's internal audit function. The QAM is divided into two parts: Part I contains the standards and guidelines, and Part II contains the tools and resources used to assess the quality of an organization's internal audit services.
The QAM is used by The IIA to assess the quality of an organization's internal audit services. The QAM contains a set of standards and guidelines that are used to evaluate an organization's internal audit function. The QAM is divided into two parts: Part I contains the standards and guidelines, and Part II contains the tools and resources used to assess the quality of an organization's internal audit services.
The QAM is used by The IIA to assess the quality of an organization's internal audit services. The QAM contains a set of standards and guidelines that are used to evaluate an organization's internal audit function. The QAM is divided into two parts: Part I contains the standards and guidelines, and Part II contains the tools and resources used to assess the quality of an organization's internal audit services.
Part I of the QAM contains the standards and guidelines that are used to evaluate an organization's internal audit function. Part II of the QAM contains the tools and resources used to assess the quality of an organization's internal audit services.
Contrast the three types of internal audit quality assessment in Effective Internal Audit Quality Assessment
There are three types of internal audit quality assessment: self-assessment, independent assessment, and peer review.
Self-assessment is an internal audit quality assessment method where the internal audit department evaluates its own quality. Independent assessment is an internal audit quality assessment method where an external body evaluates the quality of the internal audit department. Peer review is an internal audit quality assessment method where the internal audit department is evaluated by another internal audit department.
Performing Quality Assessment
There are five key steps in conducting an effective quality assessment:
1. Define the scope of the quality assessment.
2. Identify the key stakeholders.
3. Develop the quality assessment plan.
4. Implement the quality assessment plan.
5. Evaluate the results of the quality assessment.
Describe key features of planning guides
Some key features of planning guides in Effective Internal Audit Quality Assessment include:
- Outlining the scope and objectives of the internal audit
- Defining the methodology to be used
- Identifying the resources required
- Planning the timing and sequencing of the internal audit
- Developing a risk-based approach
- Creating a communication plan
Apply the planning tools to a quality assessment
There are a variety of quality assessment tools available, and the most effective tool will depend on the specific quality assessment being conducted. Some common quality assessment tools include:
-checklists
-questionnaires
- audits
- reviews
Each of these tools can be used to assess different aspects of the internal audit process and can be customized to fit the specific needs of the organization.
Describe key features of surveys
Some key features of surveys in Effective Internal Audit Quality Assessment include:
1. They provide a way to collect data from a large number of people in a short amount of time.
2. They are relatively inexpensive to administer.
3. They can be administered in person, by mail, or online.
4. They can be customized to collect specific information from respondents.
5. They can be used to assess satisfaction with a service or product, or to gather feedback about an organization or individual.
Performing the Quality Assessment.
After the completion of the audit, the key question that needs to be addressed is whether the quality of the audit is good enough to provide reasonable assurance that the financial statements are free from material misstatement, whether due to error or fraud. This is the key question because the auditor’s report is based on the auditor’s opinion on the financial statements.
The auditor’s report is based on the auditor’s opinion on the financial statements, thus the key question to be asked is whether the quality of the audit is good enough to provide reasonable assurance that the financial statements are free from material misstatement, whether due to error or fraud. This is important because the auditor’s report is what the users of the financial statements rely on to make decisions.
There are three main objectives of the quality assessment:
To provide reasonable assurance that the audit was performed in accordance with professional standards. To provide reasonable assurance that the audit was performed in a manner that provides sufficient evidence to support the auditor’s opinion. To evaluate the effectiveness of the audit procedures performed.
The quality assessment should be performed at the completion of the audit, and the results should be reported to management. The quality assessment should be performed by someone who was not involved in the audit. This person should be independent and should have the knowledge and experience necessary to perform the quality assessment.
The quality assessment should include a review of the audit documentation, and a review of the audit procedures performed. The audit documentation should be reviewed to determine if the auditor followed the proper procedures, and to determine if the documentation is complete and accurate. The audit procedures should be reviewed to determine if they were appropriate for the circumstances and to determine if they were performed in a manner that provided sufficient evidence to support the auditor’s opinion.
The quality assessment should be performed on a regular basis and should be reported to management. The results of the quality assessment should be used to improve the quality of the audit.
Lectures, debates, group exercises, and illustrations are used in the training methodology. Participants will receive theoretical as well as practical understanding of the areas covered. The emphasis is on practical application of the themes, so participants will return to the workplace with the skill and confidence to apply the techniques taught to their jobs.
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