UK: Getting The Balance Right - Delivering Fit For Purpose Internal Audit

Last Updated: 1 November 2005
Most Read Contributor in UK, August 2017

Unprecedented levels of regulation and market expectation are driving Audit Committees to place increasing reliance on internal audit functions to deliver high quality assurance over current and emerging risks across financial, operational, IT, regulatory and strategic business processes.

The ripples of the Sarbanes-Oxley Act are being felt widely – and not just by those who need to comply with it – raising the expectations and demands of Investors, Audit Committees and other stakeholders around the level of assurance required over internal controls.

Directors are becoming increasingly concerned about their own personal liability in relation to control failures and unforeseen risks impacting results. This is leading to increasing demands for reliable business intelligence to be able to give early warning areas of potential risks and deal with them before they arise. The stakes are higher than ever with recent surveys in the UK and US indicating that Finance Directors are now subject to a one strike and you’re out regime in relation to financial reporting errors and failures to predict poor results.

The 4th and 7th EU Company Law Directives are expected to increase the disclosure requirements on internal controls for listed companies and this comes on top of recent recommendations by the Smith, Higgs and Flint committees and the ASB’s OFR Reporting Standard that need to be considered when developing an assurance strategy.

All of these pressures are already starting to impact the employment market for internal auditors with a recent survey indicating that 80% of Heads of Internal Audit believe that in the current market it is difficult to recruit staff with the skills and experience needed (IIA, 2005).

Heads of Internal Audit face a difficult time balancing the demands of their stakeholders, the job market and regulators when they define their assurance plans. They need to deliver an internal audit function which is ‘fit for purpose’ – providing balanced and objective assurance over the organisation’s key risks and responses to the issue driven requirements of its key stakeholders.

How can we help?

Delivering internal audit services We provide a full spectrum of internal audit services to a large number of global and UK organisations. We have worked with over half of the FTSE 100. We have dedicated and experienced internal audit professionals available to supplement the capabilities of your team and enable you to leverage our expertise, processes and technologies to transform your internal audit function.

We have a broader and deeper range of real experts available to our internal audit practice than our competitors thanks to Deloitte’s unique integrated consulting practice – covering disciplines such as information technology and applications, forensics, supply chain and regulatory environmental affairs, along with the skills in bringing these specialists to our internal audit partnerships in a managed and consistent manner to deliver real value.

Performing reviews of internal audit effectiveness

We are skilled in carrying out effectiveness reviews of internal audit functions. Such reviews focus on five key themes: purpose and remit, position and organisation, process and technology, people and knowledge and performance and communication. Results include benchmarkings, recommendations and suggestions for desirable enhancements – leading to an improved and more effective internal audit function with an enhanced image within your organisation.

Developing assurance plans and strategies

We can help establish your assurance plan to provide the right balance between compliance, risk management and opportunity development for your organisation. By carrying out a strategic risk assessment, we can work with your key stakeholders to identify and prioritise areas of potential risk and opportunity across your audit universe and develop assurance approaches to respond to these.

Developing and rolling out strategies to embed and report on effectiveness of internal controls

We have the skills and experience to develop and deploy tools and techniques to embed controls into operational processes and systems – increasing management’s accountability for controls and enabling real time business intelligence and swift responsive action. This is achieved through self assessment programmes, early warning KPIs and optimisation of the controls and security used within your enterprise applications.

Why Deloitte

We have a team of over 600 internal audit professionals within the UK and over 6,000 globally. We pride ourselves on our pragmatic, straightforward approach and have experience of successful delivery across a wide range of industries and jurisdictions.

Deloitte is a name known and trusted by key stakeholders, including Boards, Audit Committees and, ultimately, the markets. Our firm has a specific reputation for high quality internal audit, corporate governance and risk management services. Our internal audit and risk consulting practice is the largest dedicated UK internal audit practice and was the first Big 4 practice to be set up. We are proud of our unwavering focus on quality and will deliver the practical advice and help you need to achieve a fit for purpose internal audit function.

We offer a truly unique proposition in the internal audit services market space, as the only Big Four firm to retain a global consulting practice we have access to experts in all types of business processes. We can deploy this knowledge to our teams during the scoping and reporting phases of projects, thereby adding significant value to the internal audit projects we perform.

Don’t just take our word for it …

Clearly you would expect us to speak proudly about the strength of our practice but don’t just take our word for it. We provide services to a large number of UK and global organisations helping them to improve their assurance processes and bolster their in-house expertise.

If required we can put you in touch with some of these clients for a first hand view on how we have helped them in delivering effective, fit for purpose internal audit for their organisations.

Want to know more?

So if you are looking for:

  • a business partner who can work with your organisation to not only meet your resourcing needs but also to add significant value to your internal audit projects;
  • expertise in delivering assurance over processes outsourced to third parties including IT, finance and logistics;
  • experienced consultants who can work with you to build a fit for purpose internal audit function that is designed to surpass the expectations of your stakeholders;
  • the ability to deploy processes and technologies to truly embed internal controls within key business processes; or
  • an independent expert to assess the effectiveness of your internal audit function;

then please get in touch with one of the partners from our internal audit team.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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