Internal Audit Strategy: Focus area five – KPIs and added value
31 May 2022
KPIs and added value – focusing on the final area of our strategy
For Internal Audit Awareness Month, we’ve been looking in detail at our Internal Audit Strategy (2021-24) to raise awareness of the profession.
To recap, our five focus areas are:
You can read the specifics of focus areas one to four through our news page for the Internal Audit Strategy.
Focus area five of our strategy
When effectively implemented, operated, and managed, internal audit is an important element for helping to achieve daily objectives.
Internal auditors play an important role in the governance and effective operation of an organisation.
To maintain and enhance our credibility, our effectiveness and efficiency must be monitored.
KPIs (Key Performance Indicators) for internal audit
Traditional KPIs can concentrate too much on process or outputs.
To account for the differing needs and expectations of our stakeholders, and to ensure we maintain accountability, we need to refresh our current measures.
We aim to achieve this by introducing a ‘balanced scorecard’ of performance measures which cover:
- Value drivers
- Client behaviour
- Client feedback
- The audit process
Value drivers should measure fundamental behaviours, leading to higher quality performance. Examples include the percentage of staff with professional qualifications, and compliance with PSIAS.
Client behaviour measures should record how clients respond to us and how they interact with our internal audit service.
For example we may include implementation of management actions or improved engagement with our service.
This links back to focus area one of our strategy: increasing client engagement.
Client feedback helps to capture the concept of added value – which can be subjective. Surveys need to be used with great care, and should focus on management perceptions and experiences of our auditors’ work.
Process measures are typically the standard performance indicator used by most audit functions. For example, completing the audit plan and progressing follow-ups.
These measures do provide insight. But only where they are considered alongside other qualitative measurements.
Our new approach to KPIs will utilise process measures to support the interpretation of other measures – rather than as primary indicators themselves.
Leading on KPIs and added value – Ian Morton
To keep up with a rapidly changing environment we need to be agile responsive and focused on delivering value.
Our action plan for this focus area includes developing a suite of reports from the audit management system, and identifying methods to communicate our KPIs to stakeholders.
Conclusion of our three-year strategy
We hope you’ve enjoyed reading this series of posts for Internal Audit Awareness Month.
Our three-year strategy seemed a fitting way to spread awareness and demonstrate the value of the profession of internal audit.
- Overview of our Internal Audit Strategy 2021-24
- Focus area one: increasing client engagement
- Focus area two: setting a strategic planning framework
- Focus area three: redesign and modernisation
- Focus area four: developing data analytics
- Veritau’s internal audit services for the public sector
One-page summary of our strategy
View or download the "on a page" summary of our Internal Audit Strategy 2021-24