In: Accounting
IIA Performance Standard 2050 covers the co-ordination of internal and external audit and contains the following requirement: “the CAE should share information and coordinate activities with other internal and external providers of relevant assurance and consulting services to ensure proper coverage and minimize duplication of efforts.” Please discuss the ways that may be used to foster greater co-operation.
In coordinating activities, the chief audit executive may rely on the work of other assurance and consulting service providers, however CAE is still accountable and responsible for ensuring adequate support for conclusions arrived at by the internal audit activity.
To foster greater cooperation, the CAE can meet with each of the providers to gather sufficient information so that the organization’s assurance and consulting activities may be coordinated. In smaller organizations, coordination may be informal. In large or heavily regulated organizations, coordination may be formal and complex.
CAE may use a combined assurance model, where internal audit may coordinate assurance efforts with second line functions, like
· Synchronizing the nature, extent, and timing of planned work.
· Ensuring a common understanding of assurance techniques, methods, and terminology.
· Providing access to one another’s work programs, workpapers, and reports.
· Relying on one another’s work to minimize duplication of effort.
· Meeting intermittently to determine whether it is necessary to adjust the timing of planned work, based on the results of work that has been completed.
CAE may also create a map linking identified significant risk categories with relevant sources of assurance. The comprehensive map should expose gaps and duplications in assurance coverage, enabling the CAE to evaluate the sufficiency of assurance services in each risk area.
The results can be discussed with the other assurance providers so that the parties may reach an agreement about how to coordinate activities to minimize duplication of efforts and maximize the efficiency and effectiveness of assurance coverage