Positioning Internal Audit as a strategic business partner

  • a lever for driving organisational excellence

Amid the constantly evolving business landscape, organisations are on a relentless quest to outperform their competition and secure sustainable growth. To do so they must make strategic decisions, manage risks effectively and constantly improve their processes. One ally in this mission, often underestimated, is the Internal Audit function. Far from being just a regulatory requirement or a necessary ‘evil’, Internal Audit can play a vital role as a strategic business partner – aiding organisations in achieving excellence. This article explores how organisations can leverage Internal Audits for strategic advantage and foster organisational excellence.

The Evolution of Internal Audit

Traditionally, the Internal Audit function has been associated with reviewing financial statements, ensuring regulatory compliance and testing internal controls. However, the contemporary business environment demands more from Internal Audits. In addition to safeguarding assets and ensuring compliance, Internal Audits are now expected to provide strategic insights, advisory services, and contribute to value creation.

Internal Audit as a Strategic Business Partner

The International Professional Practices Framework (IPPF) from the Institute of Internal Auditors (IIA) articulates that the role of Internal Audits should extend beyond assurance services to include consulting services. By doing so, Internal Audits transform from a ‘policing’ function into being a strategic business partner. This is how the transition materialises:

Risk Management: In today’s risk-ridden business environment, the role of Internal Audits in risk management is pivotal. As a strategic partner, Internal Audits not only identify and assess risks but also align them with strategic objectives. By providing insights into how risks could impact the strategy, they enable organisations to manage risk proactively and make better strategic decisions.

Operational Efficiency: As part of their engagements, internal auditors delve into the depth of business processes. They can identify bottlenecks, inefficiencies and areas in need of improvement. By recommending measures to streamline processes, reduce waste and improve productivity, Internal Audits contribute directly to operational efficiency and performance.

Strategic Insights: With their cross-functional view of the organisation, internal auditors have a unique perspective on how different parts of the organisation function and interrelate. They can use this vantage point to provide insights that can inform strategy formulation and execution, making them invaluable strategic partners.

Governance and Control: Good governance is a prerequisite for any successful organisation. By assessing and improving governance structures, and ensuring effective controls are in place, Internal Audits help create a robust framework for decision-making, oversight and accountability. This fosters not only regulatory compliance but also strategic alignment, enhancing organisational excellence.

Repositioning Internal Audit: Key Considerations

For Internal Audit to effectively serve as a strategic business partner, organisations need to consider the following:

Mindset Shift: The organisation must first recognise and acknowledge the potential of Internal Audits. There needs to be a shift from viewing Internal Audits as a cost or regulatory burden to seeing them as a source of strategic insights and value creation.

Skilled Personnel: Internal auditors must possess not only technical auditing and accounting skills but also business acumen, strategic thinking and effective communication skills. They need to understand the business, industry trends and the strategic landscape to provide valuable insights.

Support from Top Management: The Internal Audit function must have support from top management. This includes adequate resources, access to all parts of the organisation, and a clear mandate to extend their role beyond traditional boundaries.

 Effective Communication: Internal auditors must communicate their findings, insights and recommendations effectively. There should be open dialogue with management and the board, promoting mutual understanding, cooperation and action.


The Strategic Auditor – A Catalyst for Excellence

In a rapidly changing business environment, organisations that leverage all resources at their disposal stand a better chance of achieving sustainable success. The Internal Audit function, if appropriately positioned and equipped, can be a significant strategic resource.

As a strategic business partner, Internal Audits bring a unique blend of capabilities – providing assurance, offering valuable insights, promoting operational efficiency and enhancing governance. However, this transition does not happen overnight. It requires a shift in mindset, skilled personnel, top management support and effective communication.

The strategic auditor is no longer a distant concept but an imminent reality. As organisations navigate their paths to excellence, the Internal Audit function – the ‘strategic auditor’ – will undoubtedly play an increasingly significant role. As auditors, we must be ready to step up to this challenge, and as organisations be willing to unlock the full potential of Internal Audits. By doing so, we do not just add value – we become invaluable.

The writer is an independent Internal Audit Advisor, Enterprise Risk Management Consultant and professional trainer. He is the founder and Chief Operating Officer of Redric Consulting, your trusted partner for comprehensive training and consulting services in the fields of Governance, Risk and Compliance (GRC). With a proven track record in Internal Audit, Internal Control, Compliance, Fraud Risk Management and Cybersecurity, Redric Consulting empowers your organisation and ensures its success.

You can reach out to Frederick on [email protected]


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