How to Choose an Internal Audit Consultant
Outsourcing or co-sourcing projects to an internal audit consultant or firm can provide:
- Specialized expertise.
- The flexibility for your staff to focus on higher profile projects.
- A cost-effective way to complete projects with short-term deadlines.
- A fresh perspective of your organization’s risks and control structure.
However, reaping the potential benefits of an outside provider comes down to choosing the right consultant or firm for your needs. Whether they will be working side-by-side with your own internal audit team, or acting as your outsourced internal audit function, there are a few key considerations to choosing the best provider.
Six Steps to Choosing the Right Advisor
The following steps highlight the criteria to consider to ensure your next internal audit project exceeds your organization’s expectations.
Step One: Develop the scope of the project, and rank your organization’s criteria for an internal audit service. These criteria may include:
- Core competencies required for the project, such as risk management or compliance.
- A particular specialty related to your needs.
- Types of services available, such as outsourcing and co-sourcing.
- Additional competencies that may prove useful, but not necessary, for the project.
- Experience, background and certifications of the provider’s team.
Step Two: Create a list of candidates based on the criteria you have pooled. While thoroughly vetting this list will take time, you should diligently research each potential provider before diving into step three. This will save you time and money throughout the search process by eliminating candidates that don’t fit your requirements from the beginning.
- Look for an advisor with an established presence in your organization’s industry.
- Ask similar organizations for recommendations.
- Follow up with references to understand how the advisor has performed on other engagements.
Step Three: Submit Request for Proposals (RFPs) from your remaining candidates. These should include:
- Background information on your company, such as type of organization, location, number of employees, accounting department personnel and duties, and budget for your proposed project.
- An outline of the project objectives. The more information you are able to provide, the easier it will be for each potential provider to create a thorough proposal.
- Next steps, which should include how you would like to receive the proposal, a period of time when you will field questions as well as a deadline.
Within RFP responses, candidates should provide detailed information on their experience, areas of expertise, audit approach, estimated timeline and fees. It’s also helpful to gather the names and experience of personnel who will be assigned to your project.
You can find sample RFP templates at The Institute of Internal Auditors’ website.
Step Four: Once you have reached your proposal deadline, carefully evaluate each proposal. Assess each candidate’s responsiveness to the request, proposed cost, qualifications of the provider’s team assigned to your project, and the fit of the audit approach with your overall goals.
Using the criteria laid out in step one, narrow down your candidate list to two to four vendors to save time unnecessarily sorting through additional documents and interviewing a large pool of candidates.
Step Five: Request individual resumes or biographies from the consultant’s or firm's team. While each firm should have provided a staff overview in the RFP, this is the time to take a deep dive into each employee’s credentials.
Step Six: Conduct on-site interviews with the remaining potential firms and individual auditors to gauge:
- How well rounded the firm is in its knowledge of the areas needed to cover the defined services.
- The engagement level of upper management in your project.
- The firm’s knowledge of emerging industry news and issues.
- The creativity and resourcefulness of the advisor in determining the best solution for your project.
Hiring the right outsourced or co-sourced internal audit service can improve your company’s overall efficiency, help identify risks before they turn into crises, and save you money with flexible staffing solutions.