Outsourcing The Internal Audit Function

By: Luis A. Lopez, CPA, CFE (Posted: 11/17/2014)

Understanding the control environment of a business, evaluating and improving processes and procedures, and identifying and mitigating risk are essential for the success of any business. Many organizations achieve these tasks by establishing an internal audit function. But what options are available for small to middle size businesses with limited resources? Outsourcing the internal audit function may be the answer.

The Institute of Internal Auditors defines internal auditing as an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. The traditional internal audit function consists of an employee, or a group of employees, whose sole purpose is performing audits on various areas on a full time basis. Outsourcing the internal audit function provides flexibility to achieve the needs of an organization in a cost effective manner. Internal audits may be performed monthly, quarterly or yearly and may be tailored to address high risk areas or areas of concern. The following are the top 4 benefits of outsourcing the internal audit function to a CPA firm:

  • COST: Hiring a CPA firm to perform the internal audit function eliminates the need to recruit a qualified individual or individuals. A CPA firm may be a more cost effective option when compared to the salaries, benefits and other resources needed to establish an internal audit department.
  • RESOURCES: A CPA firm has an abundance of resources including access to current accounting literature, audit guides and internal control manuals. Additionally, a CPA is required to receive a minimum of 40 hours of continuing professional education (CPE). At BMC, non-CPAs are held to the same standard in regards to CPE requirements.
  • EXPERTISE: Focus your attention on the core business and allow a CPA firm, with personnel who specialize in assurance services, to perform the audit function. A firm with a specialized assurance department can give you the skills that you will not find in one person. Our auditors at BMC have experience in a wide array of types of entities and services and will assign an auditor that will best fit your needs.
  • INDEPENDENCE: When you outsource the internal audit function, you ensure independence and objectivity.

Internal audits may help to improve processes and procedures to ensure a system is in place to grow and prosper. We encourage you to contact Luis A. Lopez, CPA, CFE or Ricky Longoria, CPA, CFE to discuss whether outsourcing the internal audit function is right for you.