Lean Auditing: Driving Added Value and Efficiency in Internal Audit

11 Considering the Allocation of Resources to Optimize Value Add

In the past two chapters on audit planning I have explained:

• The importance of taking a value approach to the audit plan; and
• The importance of thinking about risk assurance (to avoid waste).

However, as mentioned earlier, lean ways of working do not simply encourage audit to have a value-adding plan, but push audit to consider the most value-adding plan in relation to an optimal amount of resources.

Consequently, this chapter explores in further detail the ways to look at the allocation of resources in the audit plan in order to consider what is the best possible plan. This leads on to another important topic: how to present the audit plan to key stakeholders so that:

• Key choices in relation to the allocation of resources are understood (e.g. between activity areas, key objectives and key risks);
• Key stakeholders understand how any different needs and interests have been addressed in the plan (e.g. the balance between advice and assurance within the plan);
• The impact of resourcing constraints is crystal clear.

COMMON PRACTICES AND IIA STANDARDS OF NOTE

The IIA sets out (in IIA standard 2010 C1) that an internal audit function can consider consulting assignments based on their potential to improve risk management, add value and improve the organization. The standards explain that agreed consulting assignments should be included in the audit plan.

IIA standards also explain that the CAE should communicate ...