How do you balance the assurance and consulting roles of internal audit in relation to management control?

The key is to understand the difference between assurance and consulting activities. IIA's definition of Internal auditing states that it is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. - Assurance provides assessment of an organization's risk management, internal control and governance processes and is past-focused. The scope is determined by the internal auditor after performing necessary risk-assessments. WHEREAS - Consulting provides advice, recommendations and guidance to improve an organization's risk management, internal controls and governance processes and is future-focused. The scope is determined in collaboration with the client.

Clearly identify the areas or processes to be audited. This could include financial controls, compliance with regulations, operational efficiency, or risk management.Decide whether the audit will provide reasonable assurance (thorough examination) or limited assurance (less extensive, more focused on high-level checks). Conduct a preliminary risk assessment to identify key risks related to the audit area. Consider factors such as previous audit findings, changes in operations, or emerging risks.Discuss the proposed scope and objectives with management to ensure alignment and address any concerns or insights they may have.Document the agreed-upon scope and objectives in a formal audit engagement letter or project charter.

The internal auditor has both an assurance and consulting role. The assurance role provides independent and objective assessments of processes, systems, and controls to ensure they are operating effectively and in compliance with established policies and procedures. Its main focus is valuing historical performance and identifying areas for improvement. On the other hand, the consulting role aims to add value and improve the organization's operations by providing advice, recommendations, and solutions to management. Consultants collaborate with management to enhance processes and achieve organizational objectives. The focus is mostly on current and future challenges. All said and done, there should be a balance in roles. Follow for more.

We can balance assurance & consulting by: A) Understanding management's needs B) Providing objective feedback C) Offering recommendations for improvement D) Maintaining confidentiality E) Building trust. We need to ensure independence while collaborating with management to achieve organizational goals if we are able to effectively balancing these roles i have myself observed that internal audit can contribute to improved governance and risk management.

Adhere to the Code of Ethics established by professional organizations, ensuring that you maintain integrity, confidentiality, and professionalism in all audit engagements. Ensure that your audits are conducted without bias, allowing for impartial assessments of controls and processes. Pursue relevant certifications (e.g., CIA, CISA, CPA) to bolster your credibility and demonstrate your commitment to professional excellence. Implement quality assurance reviews of your work to ensure compliance with established standards and continuous improvement in your audit practices. Maintain thorough documentation of your audit processes, findings, and recommendations to support transparency and facilitate follow-up actions.

Regularly assess the organization’s risk landscape to identify emerging risks and opportunities. Use tools and techniques like risk registers and SWOT analysis. Develop an agile internal audit plan that can be adjusted based on changes in the business environment, organizational priorities, or emerging risks. Schedule regular meetings with management and the audit committee to discuss audit progress, performance, and any adjustments needed in the audit plan. Ensure that audit findings and recommendations are communicated clearly and effectively, emphasizing their relevance to the organization’s goals and risk management efforts.

They say there is no dumb question, however in a company's culture there can oftentimes be practices or processes that have been passed throughout the organization. These processes or practices may not have been vetted or questioned and should be to ensure that they do not compromise the integrity of the organization, while also helping to improve the performance of the stakeholders. Internal Audit is not only a function of quality assurance and ethics, but one of performance improvement.

Foster strong relationships with external auditors, compliance officers, risk managers, and other relevant stakeholders. Regular communication can lead to better collaboration.Clearly outline the roles and responsibilities of each party involved in the assurance process. This helps avoid overlaps and ensures that all critical areas are covered.Develop processes for sharing relevant audit findings, risk assessments, and insights with other assurance providers. This can include regular meetings or shared digital platforms.Regularly review the assurance landscape to identify any gaps or overlaps in coverage, making adjustments as necessary to ensure all critical areas are addressed.

Collaboration is key. Understanding everyone's roles and perspective help to drive fruitful outcomes for the organization and alleviate potential risk.

Internal audit is predominately an assurance function. When internal audit resources are constrained, the primary focus must be on assurance work to prioritize commitments made in the audit plan and emphasize what the board and audit committee expect. However, if internal audit functions are not flexible, proactive, and visible in their organizations they will become less and less relevant over time. Advisory services/projects are highly effective means to address the dangers of losing that relevance. The mission of internal audit should be about assurance, advice and insight. Providing all three in the right measure will ensure internal audit can and will continue to add value as organizations evolve.

Balancing internal audit roles is key! ?? 1?? Define Clearly: Set audit scopes and objectives, aligning with management and committees for support. 2?? Stick to Standards: Follow IPPF and Code of Ethics for quality and independence in your roles. 3?? Be Adaptable: Stay flexible to evolving needs, seeking feedback for enhanced performance. 4?? Collaborate: Team up with external auditors and regulators for broader coverage. 5?? Build Trust: Demonstrate professionalism, integrity, and value to foster trust with stakeholders. 6?? Stay Tech-Savvy: Embrace technology for impactful insights and continuous improvement.