Quality Is Not an Accident — A Guide to Quality Assurance and Improvement
The Quality Imperative
Standard 12.1 requires the CAE to develop and conduct internal assessments of the internal audit function's conformance with the Global Internal Audit Standards and progress towards performance objectives .
Standard 12.2 requires the CAE to develop objectives to evaluate the internal audit function's performance .
Standard 12.3 requires the CAE to establish and implement methodologies for engagement supervision, quality assurance, and the development of competencies .
The Quality Assurance Framework
1. Internal Quality Assessments
Post-Engagement Reviews:
- Review of workpapers for compliance with policies and procedures
- Evaluation of adherence to methodologies
- Identification of improvement opportunities
Annual Self-Assessment:
- Annual internal self-assessment of compliance with professional standards
- Review of performance against objectives
- Identification of improvement areas
2. External Quality Assessments
Periodic External Validation:
- Periodic self-assessment with independent external validation of compliance with professional standards (every 5 years)
- External perspective on quality
- Benchmarking against peers
3. Performance Measurement
Standard 12.2 requires the CAE to develop objectives to evaluate the internal audit function's performance .
Key performance indicators:
- Audit plan completion rate
- Stakeholder satisfaction
- Finding implementation rate
- Audit report timeliness
- Budget adherence
Quality Assessment Example
The Rochester Institute of Technology's IACA provides examples of conformance :
- IACA has implemented a comprehensive quality assurance program which consists of:
- Internal post-engagement review of workpapers for compliance with IACA policies and procedures
- Annual internal self-assessment of compliance with professional standards
- Periodic self-assessment with independent external validation of compliance with professional standards (every 5 years)
Methodologies and Quality
The CAE must establish methodologies to guide the internal audit function in a systematic and disciplined manner . These methodologies must be evaluated and updated as necessary to improve the internal audit function and respond to significant changes .
Conclusion
Quality assurance is essential for audit effectiveness. Organizations that implement comprehensive QAIP programs will achieve higher-quality audits and stronger stakeholder confidence.
Action Items for Your Organization
- Implement a QAIP program
- Conduct post-engagement reviews
- Perform annual self-assessments
- Arrange periodic external validations
- Define performance objectives
- Review and update methodologies
