Internal audit is outcome-driven: advising on emerging risk, promoting behavioural change and informing strategic decisions. Yet it’s commonplace for performance measures to focus on task.
Changes forced upon CAEs and their organisations in 2020 due to the coronavirus pandemic have transformed the way in which many of us work. Now is a good time to think about performance measures that better reflect the critical role that internal audit has within your organisation.
Join us as we take a look at the typical performance measures used by audit leaders and ask if there are better ways to report on the value stakeholders obtain from internal audit.
Most audit leaders use KPIs: engagements completed, stakeholder satisfaction, management action plans completed and timeliness of report issue were the most common KPIs according to a Deloitte global survey of Chief Audit Executives (CAEs).
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Image credit: Deloitte - The Innovation Imperative 2018
These legacy measures resonate with internal audit stakeholders at every level. They are readily understood and evidenced.
- But do they truly measure the value of internal audit?
- Do they advocate a profession that is relevant?
- Are they fit for purpose?
Fit for the future
Internal audit is a changing profession.
Audit leaders, along with their business counterparts, are continually reminded that transformation, innovation and agility are the new normal; essentials of the digital age. A series of next-generation internal audit competencies, identified by Protiviti, are shown in the diagram below.
Richard Chambers, IIA Global’s then President and CEO, discussed internal auditors competencies at length at the Institute's annual conference in October 2019, where he said that in order to be relevant in today’s world, internal audit activities need to identify emerging risks, leverage technology and innovate how they work. He also called for better planning…