Positioning internal audit as a strategic business partner: A lever for driving  organizational excellence
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Positioning internal audit as a strategic business partner: A lever for driving organizational excellence

Amid the constantly evolving business landscape, organizations 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 organizations in achieving excellence.

This article explores how organizations can leverage Internal Audit for strategic advantage and foster organizational 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 Audit. In addition to safeguarding assets and ensuring compliance, Internal Audit is 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 Audit should extend beyond assurance services to include consulting services.

By doing so, Internal Audit transforms from a 'policing' function into a strategic business partner. This is how this transition materializes:

1. Risk Management: In today's risk-ridden business environment, the role of Internal Audit in risk management is pivotal. As a strategic partner, Internal Audit not only identifies and assesses risks but also aligns them with strategic objectives. By providing insights into how risks could impact the strategy, it enables organizations to manage risk proactively and make better strategic decisions.

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

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

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

Repositioning internal audit: Key considerations

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

1. Mindset Shift: The organization must first recognize and acknowledge the potential of Internal Audit. There needs to be a shift from viewing Internal Audit as a cost or regulatory burden to seeing it as a source of strategic insights and value creation.

2. 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.

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

4. 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.

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