Generating a Big Impact with a Small Audit Staff-Strategy II

Strategy #2: Leverage Resources

These days, it’s important for all internal audit functions to make the most of their resources, but at a shop with particularly limited resources, the ability to leverage outside resources can be especially important. While there are many creative ways to leverage resources, the four that I found to be the most powerful when leading small shops included: (a) relying on the work of others, (b) using functional experts, (c) augmenting the internal audit staff, and (d) co-sourcing.

Relying on the work of others can reduce time for planning the engagement. It may include relying on other auditors, inspectors, consultants, or any of a variety of experts and specialists. You might choose to rely on others to limit the extent of testing, to ensure accuracy or quality of work, or to perform procedures to provide a basis for your reliance. Using functional experts can significantly reduce time for planning engagements, and in some cases it can enhance credibility and limit management “push-back.” Functional experts can be hired, contracted, or borrowed, and they can be particularly important at smaller organizations, where maintaining objectivity or diversity of technical knowledge is more likely to present challenges.

Smaller shops also can use a variety of other individuals to assist with an engagement. Your engagement team might be augmented with staff from the audited activity, staff not related to the audited activity (guest auditors), or with temporary or contract employees. (Yes, audited departments are often happy to lend you personnel to assist with parts of the engagement, and if managed properly this approach can be used even on portions of assurance engagements.) Roles for these staff members may include engagement planning/research, gathering evidence, conducting interviews, or implementing quality controls. Leveraging these resources can decrease engagement cycle time, increase productivity, and enable you to include more engagements in your schedule.

Many smaller internal audit shops also choose to leverage their resources through co-sourcing if their budgets permit. Advantages include gaining access to specialized expertise, gaining credibility through use of co-sourced “experts,” and helping ensure quick response time. Typical candidates for co-sourced engagements often include areas such as technology, cost recovery, health and safety, or medical audits, where specialized knowledge is needed.

This is strategy 2 of 6.

From Richard Chambers, CIA, CGAP, CCSA

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