Many organizations are choosing to outsource some or all internal audit activities to focus on core competencies. If planned, implemented, and monitored correctly, outsourcing can enhance the internal audit function by expanding capabilities, increasing flexibility and quality, and reducing overall costs.

Background

Traditionally, internal audit activities have been managed by internal departments. However, there is a growing trend toward outsourcing, enabling organizations to reduce compliance costs and gain access to specialized expertise. The focus is on ensuring that auditing and compliance efforts align with strategic priorities, making outsourcing a valuable approach to meeting internal audit needs.

Organizations are also looking to reevaluate the scope of the internal audit function, seeking top-level skills from industry experts and artful communicators who are respected by business leaders and boards. Outsourcing can be a critical strategy to meet these needs.

Benefits of Outsourcing the Internal Audit Function

Outsourcing internal audit functions offers several benefits:

• Access to leading internal audit practices and skill sets, including continuous auditing and monitoring capabilities.
• Ability to focus on core business competencies.
• Access to skills and resources when and where needed, turning a fixed cost into a variable cost.
• Enhanced independence of the internal audit function.
• More effective cost management.
• Ability to address human resource challenges specific to internal audit.

Proposed Next Steps

To assess whether your organization should outsource the internal audit function, consider the following questions:

• Are we maximizing the value we receive from our internal audit function, and do our stakeholders perceive these benefits?
• Is internal audit highly respected within the organization, and does its work add value?
• Does the internal audit leader command the attention of the board and senior leaders?
• Is internal audit invited to the leadership table?

Conclusion

Outsourcing the internal audit function can provide significant benefits, but it must be approached thoughtfully. Organizations cannot relinquish all responsibility for the outsourced function; alignment with business priorities and leadership will be critical to success.

DMO and Associates provides outsourced internal audit services to organizations within the region, linking strategic direction and objectives to the audit work delivered by their experts.