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Evaluating whether your Internal Audit Plan is fit for purpose
For many audit committees now is the time when your head of internal audit will be presenting their annual (or possibly rolling six month) plan. As audit committee members we need to assess whether what the internal auditors are proposing is likely to give us reasonable assurance that the management is managing the organisation’s risks effectively.
Organisations do have different expectations about which risks internal auditors will assure them about. Some organisations will only ask for an opinion independent of line management regarding compliance with key financial and operational controls - but these days audit committees increasingly expect an evidence-supported judgement on the organisation’s capability to manage known operational risks and key elements of strategic risks, both now and in the future.
The essential features of a good internal audit plan are that it will have the coverage and depth to provide evidence to support the level of assurance the audit committee wants, using the available resources to best effect. We need to know: