You lost your internal auditor. Now what?
Internal audit is an important function. It provides independent, objective evaluations of the effectiveness your organization’s operations and internal controls. It assists management in identifying potential weaknesses in controls. And it’s how management ensures assets are protected from internal and external threats and verifies processes are operating in accordance with policies and procedures.
Losing your internal auditor often leaves management wondering where they’re going to go for a qualified replacement.
Promote from within
When you lose your internal auditor, you may want to look internally to see if there is an appropriate replacement. Organizations with an internal audit department may have someone already trained and available to step into that internal auditor role with limited interruption. You could potentially lose your lead internal auditor but still have a qualified person available to step into that role.
While many organizations do not have their own internal audit department, they may have a qualified person already. Look internally to see if you have someone who is knowledgeable in operations, policies and procedures. They may be able to step into the internal auditor role in time with appropriate training. Note that promoting from within may save you recruiting costs but not necessarily training costs.
Hire a replacement
Even if you have an internal department and promote from within, you will likely need to find someone to add to the team. If you don’t have an internal audit department and did not have anyone internal to fill the role, you will need to look outside of your organization to find a replacement.
One of the benefits of hiring someone to fill your internal auditor role is bringing in someone with different experiences than your previous internal auditor. They will be able to view things with a fresh set of eyes and potentially identify issues that had previously gone undetected.
While there are advantages to hiring a replacement, there are also some disadvantages. There will likely be extra costs for recruiting, hiring and training. Finding an experienced replacement will be time consuming, and then there is the time needed for the new person to learn how your organization runs.
Outsource the function
Another option is to outsource your internal audit function by hiring an external auditor.
There are numerous benefits to outsourcing internal audit. You can rely on having qualified professionals step into the role and complete the internal audit plan with limited disruptions. External auditors are also able to perform the internal audits in a fraction of the time of your internal auditor. Outsourcing internal audit generally saves your organization money because you won’t incur recruiting, training, payroll and benefit expenses.
Because external auditors work with a variety of institutions, they also bring experience and expertise specific to internal auditing. They may be aware of emerging risks your internal auditor was unfamiliar with. They also bring knowledge and experience in various situations, making them able to address difficult situations within your organization.
If you prefer to have an internal auditor on staff, you should consider co-sourcing with an external audit firm. The audit firm would be able to train your internal auditor and perform the higher risk, more complicated internal audits. Co-sourcing also gives your internal auditor someone to go to when they have questions or issues.
Wipfli can help
All is not lost when your internal auditor leaves. You have several options for finding a qualified replacement, whether it’s promoting from within, hiring from the outside or outsourcing/co-sourcing. While change may be difficult, it can also be a good thing to get a fresh perspective.
If outsourcing or co-sourcing is an ideal solution for your organization, Wipfli can help. We have deep experience as internal auditors and can offer that fresh perspective, as well as help train your internal auditor if needed. Click here to learn more.
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