Internal auditing is a crucial aspect of any organization’s governance and compliance. It ensures that an organization operates effectively and efficiently, while also adhering to legal and regulatory requirements.

However, internal audit functions can be costly to maintain and may not always have the necessary resources and expertise to perform their duties effectively.

Benefits of Internal Audit Outsourcing

Cost Savings

One of the primary reasons organizations outsource internal auditing is to save money. By outsourcing, organizations can reduce their internal audit staffing costs, as well as the cost of purchasing and maintaining audit software and other technology.

Increased Efficiency

Outsourcing also allows organizations to increase their efficiency by leveraging the resources and expertise of a third-party provider. Providers typically have a larger pool of auditors than most organizations, which can help organizations fill staffing gaps and provide additional support as needed.

Improved Compliance

Internal audit outsourcing can also improve an organization’s compliance posture. Providers often have deep knowledge of legal and regulatory requirements and can help organizations identify and address areas of non-compliance more effectively.

Real-Life Examples

Case Study 1: XYZ Corporation

XYZ Corporation is a global manufacturing company that operates in over 50 countries. The company’s internal audit function had been struggling to keep up with the demands of its rapidly growing business.

In response, the company outsourced its internal audit function to a third-party provider.

The provider was able to quickly scale its resources to meet XYZ Corporation’s needs and provide additional support as needed. The provider also helped the company implement new audit software and tools, which allowed the organization to automate certain aspects of its internal audit process.

As a result, XYZ Corporation was able to reduce its internal audit staffing costs by 25% while also improving the efficiency and effectiveness of its internal audit function.

Case Study 2: ABC Bank

ABC Bank is one of the largest banks in the United States, with over $1 trillion in assets under management. The bank’s internal audit function had been struggling to keep up with the complexities of the financial industry and the ever-changing regulatory landscape.

In response, the bank outsourced its internal audit function to a specialized provider.

The provider was able to provide the bank with the expertise and resources it needed to stay compliant with legal and regulatory requirements. The provider also helped the bank implement new technology and tools, which allowed the organization to automate certain aspects of its internal audit process.

As a result, ABC Bank was able to improve the efficiency and effectiveness of its internal audit function while also reducing its compliance risks.

Key Considerations for Selecting a Provider

Expertise

When selecting a provider, it is important to consider their expertise in specific areas of internal audit. Providers should have deep knowledge of legal and regulatory requirements and be able to provide specialized support in areas such as risk management, compliance, and governance.