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FAQ About Our Internal Audit Services
As defined by The Institute of Internal Auditors Global, internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.
Internal audit focus on the 3 objectives:
● Effectiveness and efficiency of operation procedures and internal control design and implementation
● Compliance with the applicable laws, regulations and standards
● Reliability, adequacy, accuracy and completeness of financial reporting data
Why should I outsource/co-source internal audit functions instead of setting up inhouse audit functions?
A fully functional inhouse internal audit function costs about RM180,000 annually, on the basis of similar workload, expertise and requirements of 1 audit cycle per quarter with some ad-hoc assignments from time to time. According to our internal research on the 2019 internal audit fee of Bursa Malaysia listed companies, the average fee per internal audit cycle is RM15,000. That is approximately 60% cost savings. Outsourcing internal audit gives you the benefit to scale the audit frequency and assignment job scope according to your business needs, rather than a fixed cost commitment. Co-sourcing internal audit gives you the advantage of utilizing the leadership, professional experience and advice of a third party; while internal resources are able to perform the voluminous, routine and standardized assignments for a better cost and quality synergy.
Internal audit requires expertise that varies between a wide range of skill sets. Only large organizations have the ability to maintain a specialized talent in each field internally, i.e. IT security risk, operational audit, financial reporting audit, data analytics, corporate governance and in-depth knowledge of various regulatory frameworks (depending on the nature of business and the scale of the organization). Recruiting, maintaining and engaging in internal auditors with specialized expertise can be challenging and costly. Outsourcing grants smaller-sized companies the ability to immediately tap into the resources of professionally qualified practitioners.
Inhouse internal auditors may not be aware of industry best practices due to limited exposure confined within one organization and industry. Outsourced internal audit functions initiate innovation and thinking out of the box by looking into your operation with a fresh pair of eyes from various industries, and advise you to implement best practices.
Last but not least, third parties are always more independent and reliable from a corporate governance perspective. Inhouse internal audits may be subject to familiarity threats over time which may impair objectivity.
It varies from assignment to assignment, depending on the nature, timing and extent of the scope of work. Usually, each internal audit cycle is set for 3 months from start to finish. From the date of appointment to making necessary audit planning and resource allocation may take about 1 month of preparation. Audit fieldwork, drafting and reviewing of internal audit reports takes approximately 1 month. Management’s response is obtained within 1 to 2 weeks.
In accordance to best practices of Malaysian Code of Corporate Governance (“MCCG”) 2017, our internal audit reports will tentatively be finalized and circulated 1 week before your Audit Committee or Board of Directors meeting to allow the users of report in having access to the report prior to the meetings for discussion and brainstorming purpose.
A well-functioning, sufficiently resourced internal audit function that interacts with management and the Audit Committee or Board of Directors is vital to the success of an organization. Internal audit will assist in identifying and assessing risks, and proposing sound recommendations to the governance, risk management, internal controls, and activities of an enterprise.
According to the Listing Requirements of Bursa Malaysia and MCCG 2017, a public- listed company in Bursa Malaysia is mandatory to establish an independent internal audit function, whether outsourced or inhouse. Similar requirements may apply to other public-listed or public-interest entities globally.
Whereas for private entities, it is up to the management’s direction and voluntarily establishment. It is recommended for any sizable business to have an internal audit function in order to enhance corporate governance and to ensure the effective and efficient functioning of an enterprise.
More than 18 years in the industry of corporate governance, consultancy and internal audit.
We are up to date of the market best practices by constantly updating our technical know-how and audit program by referring to the latest framework and standard setters, giving you the best value for money services.
From global professional bodies which ensure our compliance to continual professional development and work deliverables in professional standards.
Our exposure to diversified industry background, technical experience, strategic partnerships, and team of professionally qualified consultants make us the brand of trust.
Our services are specially tailored to each and every client’s specific needs and preference, and our people are genuinely accessible and responsive. We will also allocate recurring service teams for our retainer services for efficiency.
We have a fair and transparent pricing structure according to the market rate; and our corporate values and commitment will ensure every single cent you pay is worth it.
Please get in touch with us, we shall advise you the internal audit function accordingly based on your objective, requirements, timeline and organization feasibility.