By David Walsh, III, CIA®, CPA, CFE, CGMA
Quality Assessment Services Specialist
Your quality assessment review (QAR) may only come along once every few years, but it’s what you do in the meantime that makes the biggest impact. Take the Quality Assessment and Improvement Program (QAIP), for example: This is an area where many organizations don’t do as well as they could. By investing time and energy into the QAIP, you can drive improvement in overall performance.
All chief audit executives (CAEs) are expected to develop and implement a robust QAIP covering all aspects of the internal audit activity including consulting, and three main areas exist on which to focus.
Throughout your QAIP, do not underestimate the audit committee’s role in the success of this program. The audit committee is responsible for holding your CAE and internal audit function accountable. As such, the committee is the ideal driver for improving your QAIP, as the results and improvements from the QAIP must be reported back. If the precedent and expectation hasn’t already been set with the committee, prioritizing the QAIP at the audit committee level is the first step to improvement. In this area of your internal audit function, further education on the importance of the QAIP to the mission of your internal audit function may be needed.
Internal assessments are essential to improving your overall QAIP. After all, we often solve most of life’s problems by looking inward. This includes your ongoing monitoring activities and periodic self-assessments.
Your ongoing monitoring has a lot to do with the day-to-day work and products your team delivers. By assessing the current state of your engagement planning and supervision techniques, you can uncover ways to improve your processes. Do you survey your clients to see how they felt about the experience? This can be a great way to learn where you can improve in your process. This goes hand-in-hand with standardizing your work practices as well and ensuring everyone in the team is on the same page.
Furthermore, take a look at your workpaper procedures, management review and signoff procedures, and report reviews. Is there something in these steps and deliverables the team gets caught up on? How can you improve the overall function and usefulness of this information? Taking micro-steps to improve your day-to-day procedures will improve overall efficiency for the long-haul.
Periodic self-assessments help ensure the audit function continues to conform to the International Professional Practices Framework (IPPF) and the Code of Ethics is applied. This step is essential because the long game is to have a positive QAR experience. Implementing a culture of knowing and applying the standards and Code of Ethics as an expectation for your team can vastly improve the outcome of your QAR. Dedicate time to education and training in these areas. Start by covering one section of the standard weekly and progressively working your way through these documents with your team.
You recognize your external QAR is coming around at least every three to five years. These can be accomplished by having a full external assessment, provided by an external assessor or team, or performing a documented self-assessment with accompanying validation from a qualified, external assessor. While this assessment is required, it is also a tremendous opportunity to grow and facilitate improvement within your audit function. The benefit of an outside perspective can be extremely valuable in identifying your strengths as well as your opportunities for improvement which you may not be able to self-identify.
By prioritizing your internal assessments, realizing the value in your external assessments, and engaging your audit committee in the process, you can dramatically improve your organization’s QAIP.