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Planning for Quality

The internal audit strategy is the glue that binds the internal audit function and defines its vision and purpose. The strategy articulates what success will look like for internal audit and identifies the opportunities, risks, and resource implications of internal audit’s planned approach.

Pitt Group worked with a major Australian Government agency to develop an internal audit strategy and quality improvement plan. The new CAE had recognised that the team’s approach to internal audit was dated and believed stakeholders widely saw the team as “corporate policemen”. Engagements were focused on corporate and financial functions; reports offered limited insight and tended to result in recommendations for additional controls being layered over existing processes.

Pitt group started with conversations with the internal audit team and a health check of the function’s maturity – identifying several conformance issues and determining the function’s maturity as level two (emerging) on a five-point scale. Pitt Group and the CAE then met with key stakeholders across the agency, including the audit committee, key senior executives, external auditors (in this case, the Auditor General’s Office) and other assurance providers. They spent time listening to these stakeholders about their expectations of internal audit and the extent to which expectations were met. These conversations also allowed the CAE to confirm her targeted maturity level (level four – leveraging).

Pitt Group and the CAE shared the stakeholder feedback with the internal audit team and together developed an internal audit strategy that:

  • articulated internal audit’s values and the link between these and the agency’s values and strategic priorities

  • included a set of principles for undertaking internal audit engagements aligned with the Institute of Internal Auditor’s Core Principles in the International Professional Practices Framework

  • included commitments to stakeholder engagement (that were supported by a separate stakeholder Engagement Plan)

  • included overall objectives and outcomes for the internal audit function designed to move the function from an “emerging” maturity level to a “leveraging” level over three years.

 

Once the strategy was by the audit committee and senior executives, Pitt Group and the CAE worked with the internal audit team to develop a quality improvement plan that Included high-level focus areas and KPIs for measuring the objectives and outcomes over three years. This was complemented by a detailed action plan that included activities and deliverables for the following twelve months.

Planning for quality?

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