Outsourced and Co-sourced Internal Audits: Which One Is Right for Your Organization?
In your diligent efforts to help your organization achieve its goals, you probably work continually to find the best methods of performing internal audits (IA). Your concerted efforts—along with your IT team, executive staff and departmental managers—in improving the internal auditing process can help to shape the future of your company.
Over the past 10 to 15 years, many companies have chosen to outsource or co-source their internal audits to help reduce some of the professional stress that accompanies an in-depth and informative internal audit. You may find yourself wondering how you will coordinate your upcoming IA when your everyone on your auditing team has a full desk and little time to step away.
Perhaps an outsourced or co-sourced internal audit is the right choice for your organization. Take a few moments to learn more about both of these professional options to see how each might work for your organization, and ultimately, which might give you the best results.
A Primer on the Role and Importance of the Internal Audit
The internal audit, according to the American Institute of CPAs (AICPA), allows organizations the chance to objectively and thoroughly examine, monitor and analyze the reliability of internal controls related to financial reporting to safeguard assets. The internal audit also helps to improve operational effectiveness and compliance pertaining to all relevant laws and regulations. Investopedia adds that audits can help you identify simmering issues before they officially become major problems, such as the attempt to steal intellectual property.
Explore the Idea of Planning an Outsourced or Co-Sourced Internal Audit
Even if you have directed several internal audits over the years, there are times when this process is simply too overwhelming for your inundated go-to in-house IA team. Sometimes you need reinforcements to step in without missing a beat, or perhaps you want to streamline your processes and need the fresh perspective of experienced auditing professionals outside of your organization.
Either way—and for any other reason you might need an outside professional resource—outsourcing or co-sourcing might be just what your organization needs for your upcoming internal audit.
What Is Outsourcing and How Can It Benefit Your Organization?
Outsourcing can help out by taking on many key aspects of your upcoming audit. Respected IA professionals perform these tasks daily, which makes it easier to perform the necessary steps of an audit, and further to identify underlying issues to course-correct, as quickly as possible.
When you hand over the reins of your audit to qualified professionals like one of our IA teams at I.S. Partners, LLC., they can perform an internal audit in about half the time that your in-house team can, thanks to decades of experience and the fact that your audit is their number one priority.
Following are just a few of the specific benefits that outsourcing can offer your organization:
- Greater assurance and risk coverage.
- Short-term and long-term flexibility and scalability, depending on your specific agreement.
- Savings for your company that can range between 20 and 40 percent due to experience, efficiency and allowing your team members to stay at their desk, completing their regular projects.
- Seamless coordination of the various tasks associated with the internal audit, including risk, governance and compliance.
- Access to cutting-edge tools and methodologies, such as advanced data analytics that allow the auditing team to perform more detailed and sophisticated data analysis and in-depth monitoring.
- Identify emerging and hidden risks easily and quickly to help avoid greater problems in the future.
- Report the results in a thorough and objective format.
- Relay findings, knowledge and capabilities to your organization in a meaningful way to help refine business strategies to help you and your team achieve strategic goals and objectives.
What Is Co-sourcing and How Can It Benefit Your Organization?
Co-sourcing allows you to rely on the expertise of a professional auditing firm while still participating to the extent that your team can and would like to. You might also call on a co-sourced auditing team to deal with an intensely specific and complex issue or to perform a highly specialized portion of your audit. Either way, your co-sourced auditor’s proficiency allows your in-house team to focus on the rest of the audit.
This approach to performing your internal audit offers you the best of both worlds since you will have an active hand in the process—perhaps by offering nuggets institutional knowledge or quickly accessing a paper file—while benefiting from your auditing team’s expertise and streamlined methodologies.
Following are just a few of the numerous additional benefits involved with co-sourcing your internal audit:
- The savings of bringing in a co-sourced professional auditor is far greater than hiring a permanent specialist or pulling busy employees away from daily tasks.
- Co-sourced auditing teams offer flexibility that allows regular staff to participate in the internal audit as much as they are able to without losing too much time on their daily tasks.
- You have easy and regular access to an objective perspective throughout the course of your internal audit and upon receiving results. An objective co-sourced auditor can help your team understand what changes you need to make, based on the audit’s results, to make improvements, no matter how resistant to change your team may be.
Many of the benefits associated with co-sourcing are similar to those of outsourcing, but on a smaller scale and according to your specific needs.
At I.S. Partners, LLC. We Can Help with Your Next Internal Audit
Whether you need outsourcing or co-sourcing, our team at I.S. Partners, LLC. is here, and we are ready and happy to help. We can provide the expertise or relief you need to perform a highly informative and effective internal audit to improve your business processes and avoid risk.