Why Consult with Internal Audit?
by Jane Kayla Laxamana
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.
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 (also known as assurance services). However, the highly dynamic 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 teams?
Consulting service involves providing professional advice within a particular subject matter. This is different from assurance services, where IA independently plans the procedures, executes the works, and expresses opinion based on the assessment of processes and controls. By contrast, the nature and scope of work for consulting service is agreed on by the IA team and the client. The procedures that will be performed are intended to directly aid the client in meeting specific 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.
That said, we listed the top 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. IA offers a 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. IA 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. IA 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 does not just implement band-aid solutions for the issues encountered in a process. Its goal is to come up with all-inclusive solutions to identified issues.
4. IA 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 an 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
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