Why Consult with Internal Audit?

by Jane Kayla C. Laxamana, MAY 2021

How can Internal Audit (IA) be a valuable partner? This is a question, as well as a challenge, that has to be answered by Internal Audit teams across the globe.

IA’s more commonly known role is to contribute to the organization’s goals by providing value-adding recommendations aimed to improve business operations, reduce risks, and enhance oversight functions, through its regular audits (or what is called assurance services). However, the fast-changing business environment and emerging risks and disruptions have required IA teams to take a less known, but equally critical role of being consultants within organizations. But what is consulting? And how does it differ from the regular audits performed by IA?

MPTC Internal Audit Team

Consulting service is providing professional advice within a particular subject matter. Unlike assurance services where IA independently plans the procedures, executes the works, and expresses opinion based on the assessment of processes and controls, the nature and scope of work for Consulting service is agreed between the IA and the client. The procedures that will be performed are intended to directly aid the client in meeting their goals. Advisory services, conducting training, or providing inputs on process design/ improvement are examples of works that IA may perform as part of a consulting service.

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In here, we listed reasons why the organization and its business units should seek IA’s advice in addressing governance, risk management and control processes issues by way of consulting services:

1. Internal Audit’s macro-level perspective

IA is uniquely placed in the organization which allows it to provide advice based on broader perspectives, i.e., considers process, entity, and economic conditions. For instance, changes in one operational process would consider financial and legal impact as well as impact to business processes related to such change.

Further, IA’s reporting lines to both the senior management and the board gives it access to information and historical experiences of the organization (not available to any other unit of the organization) relevant to the understanding and validation process and is key to establishing root-based solutions.

2. Internal Audit provides objective insight and foresight

The concept of “seeing with fresh eyes” fully applies in this situation. Seeing familiar things as if one has never seen them before or bringing an outsider to gain understanding of what is going on in the organization brings an independent evaluation and a better mix of solutions in the table. Further, IA identifies trends and brings attention to emerging risks to future-proof the business.

3. Internal Audit builds consensus and manages conflicts

IA’s role is not only limited to providing advice but also to express disagreement on proposed solutions and organize opposition, if necessary. With a wider perspective, IA has the means to encourage parties to take a pause, look back and understand the dilemmas which may not be known to individual parties. Thus, it assists in establishing not band-aid solutions for a process, but rather, all-inclusive answers to identified issues.

4. Internal Audit offers feasible, future-proof, and sustainable solutions

IA’s work is grounded on sound-based inputs, completed through a diligent process of information evaluation, and considers the appropriateness, feasibility, and effectiveness of recommendations. Thus, solutions are able to meet future requirements and not only address present dilemmas.

IA’s role as trusted advisors aims to assist the organization in providing optimal solutions in response to a greater demand to be ahead of risks and prevent disruptions. IA serves as enabler of change by encouraging collaboration between the advisory team and the client in coming up with the best solutions. To achieve this, clients are to acknowledge the need for change and trust that there will be no risk of being judged during consultations. After all, as the saying goes:

“What we want for others doesn’t work, unless they want it for themselves.”

Bryant McGill, Human Potential Thought Leader, Best-Selling Author, and United Nations Appointed Global Champion
Photo by Sora Shimazaki on Pexels.com

This article is published in celebration of the International Internal Audit Awareness Month this May 2021 and highlights Internal Audit’s role as trusted partners of the organization.

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About the writer:

Jane Kayla C. Laxamana. Kaye is one of the members of the Internal Audit team, handling Finance and Support engagements. She’s a graduate from Holy Angel University and an art enthusiast. Aside from reading and writing, she also loves going to live gigs and concerts, musical plays, and visiting parks and museums.

 

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