Evolving Internal Audit function compositions

Matching Internal Audit talent to business needs

  • Share

As business needs increase in complexity, so too do resource requirements.

Apart from hiring internally, Internal Audit functions have a number of other options available to supplement staffing shortages or resource gaps:

  • Interns
  • Guest auditor or auditor rotation programs
  • Co-sourcing or outsourcing arrangements with third-party providers

Internships
50% of respondents stated that they have between 6 and 10 interns each year. These interns can be hired as full-time resources if the Internal Audit function needs to expand, especially to fill core audit positions.

Guest auditor and auditor rotation programs
77% of respondents state that they have either a guest auditor program or a staff rotation program in place. Of those with staff rotation programs, nearly 50% have a formal program for rotations to and from the business or finance.

More than a third of the rotations (37%) average 6 to 12 months; another quarter (27.6%) run a year or more, from 12 to 17 months. Respondents using these programs seek to improve the control environment (65%), gain access to specialized capabilities (60%) and develop future leaders (55%).

Knowledge sharing strengthens relationships between the business and Internal Audit and provides additional visibility to improve risk management.

Through guest auditor and auditor rotation programs, staff from the business gain experience within Internal Audit serving as subject matter resources on a particular topic. Conversely, employees from the business are able to serve as ambassadors, taking what they learn from Internal Audit back to the business.

Co-sourcing and outsourcing
Co-sourcing and outsourcing have always been controversial options for the Internal Audit function.

In our 2010 Global Internal Audit Survey, 41% of respondents considered co-sourcing a viable long-term business option, and (33%) considered outsourcing an option. At the time, 54% of respondents rated loss of control and oversight as the number one reason they may not co-source their Internal Audit function.

Co/outsourcing comparison to last year

Much has changed in three short years. Now, 82% of respondents suggested that they co-sourced or outsourced some or all of their Internal Audit capabilities. While the concerns still remain, Internal Audit is realizing that third-party resources can work alongside in-house resources to gain greater synergies.

Internal Audit functions need to shift competency and training efforts to ensure they have the right skills to meet audit plan requirements and management expectations.

Co/outsourcing comparison to last year

Co/outsourcing comparison to last year ×