The External Quality Assessment Process - The Institute of Internal Auditors

The External Quality Assessment Process
An external quality assessment evaluates conformance with the International Standards for the Professional Practice of Internal Auditing (Standards), the internal audit and audit committee charters, the organization's risk and control assessment, and the use of successful practices. An internal audit activity must obtain an external assessment every five years to be in conformance with the Standards.

The benefit of an organization undergoing a QA is that it allows the internal auditors to state that their activities are conducted "in accordance with the International Standards for the Professional Practice of Internal Auditing." It also builds stakeholder confidence by documenting management's commitment to quality and leading practices, and the internal auditors' mindset for professionalism. Obtaining an external QA provides evidence to the board, management, and staff that the audit committee and the internal audit activity are concerned about the organization's internal controls, ethics, governance, and risk management processes.

Regardless of an organization's industry or the internal audit activity's complexity or size, there are two approved approaches to external QAs. The first approach - an independent assessment with independent validation - involves an outside team under the leadership of an experienced and professional project manager. The team members should be competent professionals who are well versed in best internal audit practices.

The second approach seeks out an objective outside party for independent validation of the internal self assessment and report completed by the internal audit activity. This approach brings in a competent independent evaluator who is well versed in quality assessment methodology to validate the aforementioned self-assessment of the internal audit activity. In addition to reviewing the self-assessment, the validator substantiates some of the work done by the self-assessment team, makes an on-site visit, interviews senior management, and either co-signs the CAE's report regarding conformity to the Standards, or issues a separate report on the disparities.

Integral to both external QA approaches is the element of objectivity. Without this, the Standards have not been met. The CAE should fully explain to the audit committee why the QA is necessary and valuable, how the approaches to external QAs differ, and which of the two is deemed most appropriate for the organization.

NOTE: It is important that the CAE receive board approval for the chosen approach.

If you are interested in receiving an external Quality Assessment (QA) or Self-Assessment with Independent Validation (SAIV) proposal from The IIA, please complete an Inquiry Form so we may generate a no-obligation proposal for you. The IIA proposal turnaround time is approximately two weeks after receipt of all necessary information.

Should you have any questions about the quality Standards or the external QA process, please feel free to e-mail us at quality@theiia.org.

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