Internal audit - Ernst & Young - Slovak Republic

Ernst & Young is a global leader in the provision of internal audit services. In the last three years, after investing more than USD 350 million into developing this area, we have built the largest network of internal auditors worldwide, to help clients increase internal audit and risk management effectiveness.

Ernst & Young’s leading position is based on four pillars, i.e. experienced team, methodology, tools and responsibility for the development of the profession. These pillars are the foundation from which we are able to assign the right people to the right place at the right time and to provide them with the right tools to meet the client’s needs.

Experienced team. Our internal audit team has at its disposal specialists with long-term experience in establishing internal audit departments, as well as with performing all types of internal audits. Our experienced professionals will provide flexibility in filling positions and will adjust promptly to the needs of your organizations. We have extensive experience with various forms of services in the area of internal audit (we are currently in charge of the Czech Republic’s largest project in the area of internal audit co-sourcing).

Methodology. We use our own internal audit methodology complying with international standards that has been tested in practice and employs a number of practical tools. In general, our methodology is based on a distinctly client-oriented approach, i.e. an active and open approach to the management of the audited unit/process, and its involvement in all phases of internal audit.

Tools. The tool used to support internal audit implementation is EY GRC (Governance-Risk-Compliance), a top solution designed by leading manufacturer of these applications and adapted specially to Ernst & Young’s needs. It contains modules for risk analysis, planning, documentation, reporting, monitoring and evaluation of findings and corrective measures within the framework of the internal audit. EY GRC integrates our methodology and knowledge database within a single system, thus increasing efficiency, team collaboration and the quality of our services. In addition, the tool contains databases of process and risk maps, as well as related control mechanisms, specific to individual industrial branches. These knowledge databases are continually updated on the basis of the experience of Ernst & Young team members worldwide.

Responsibility for the development of the profession. Ernst & Young fully endorses responsibility on the part of internal audit practitioners. It is our objective to permanently and systematically contribute to the development of the internal audit profession and the knowledge acquired is published regularly. Worldwide, we support the activities of IIA (The Institute of Internal Auditors), in the Czech Republic we are the partner of the Czech Institute of Internal Auditors (CIIA). In Slovakia, as in other European countries and the US, we have established the Internal Audit Directors’ Network, a global initiative aimed at creating a platform for sharing information and supporting the development of the internal audit profession.

Our services

Ernst & Young, as the leading company in the area of internal audit, provides the following comprehensive services:

• 
• Introduction of internal audit function; its restructuring and increase in effectiveness
• Expert support for selected audit activities (e.g. support in performing IT/IS audits, forensic investigation, etc.)
• Internal audit quality (effectiveness) assessment in accordance with the Institute of Internal Audit Standards and Ernst & Young methodology
• Internal audit performance, both partial (co-sourcing) or complete (outsourcing)
• Specialized internal audit performance (e.g. evaluation of internal control system and corporate gover nance)
• Training for internal auditors (including coaching and individual consultations)

References

Our current projects include the implementation of internal audit co-sourcing for almost the entire Czech gas industry group. This implementation is already in its fifth year. The co-sourcing consists of the performance of process audits for the whole group and audits on request for individual companies. A fraud prevention program for the whole group also forms part of the project.

Our next project is a comprehensive restructuring of the internal audit department of a major energy group within the conditions of the liberalized market; this is implemented in tandem with the company’s risk management project. Restructuring includes an evaluation of the current status of the internal audit department, training of the internal audit team, drafting an audit plan, as well as re-positioning internal audit within the group as regards its competencies, principles and procedures. Currently, we are providing support in the performance of individual audits according to the approved plan whilst also helping to implement the fraud prevention program.

Yet another type of project that has been successfully implemented with a number of customers is the internal audit quality assessment. Our approach is not based solely on an evaluation of compliance with standards and regulatory requirements but we also concentrate on evaluating the effectiveness and strengths and weaknesses of the internal audit activities. In our evaluation, we put an emphasis on providing practical and feasible recommendations that enhance the value to the company of the internal audit. Both well-proven tools and techniques and unique benchmarking databases prepared by the International Institute of Internal Auditors are used in the evaluation. Quality is assessed and recommendations for enhancement are delivered in both the private (telecommunications, banks, manufacturing plants) and the public sectors (ministries).

Besides the above types of projects, we have implemented a large project, the objective of which was to strengthen the role of internal financial control (so-called PIFC) in public administration in the Czech Republic. The project included activities within the frameworks of financial control, risk management and internal audit. Another component of the project was the implementation of effective forms of education (including practical training) for key staff members within the framework of the implementation structure for European funds. The skills acquired in this training were subsequently extended by performing 10 practice audits and financial checks at ministries and regional councils. All outputs and skills from these projects were ultimately summarized (including templates and sample documentation) in a reference book available to the Czech Republic’s entire public administration.