The Effectiveness of Internal Audit in Central Government
The Stationery Office, Jun 20, 2012 - Business & Economics - 29 pages
This report examines the effectiveness of internal audit in central government, covering both main departments and their associated arm's length bodies. Government is not getting the most out of the £70 million it spends on internal audit because the service does not always focus on the right issues and it is often not of sufficient quality to be useful in decision-making. 84 per cent of respondents to an NAO consultation considered internal audit added some or substantial value to their organisation, but had concerns over the current depth of insight, relevance and underlying execution of internal audit work. Many key stakeholders believe that internal audit work is not sufficiently tailored to be relevant to the different issues facing individual organisations. Treasury guidance on what internal audit should deliver is not sufficiently specific and there is little consistency in the application of standards. Variations in quality and coverage mean that the NAO often cannot take assurance from internal audit work. There are specific areas where internal audit could be more effective: the usefulness and relevance of reports; the expertise of staff, including expertise on IT-based information systems; the identification of efficiencies in the organisation; and the ability to offer advice to senior management. HM Treasury's Internal Audit Transformation Programme is a partial solution to the issues identified by the NAO, but needs more detail on what should be expected of an effective internal audit service. Nor does the Treasury have an accurate view on the costs of internal audit in government.
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accounting officer added some value added substantial value arm’s-length bodies audit across government audit days audit in central Audit Transformation Programme capability of internal central government bodies Comptroller and Auditor controls over core core systems coverage deliver delivery departments effective internal audit effectiveness of internal expect expertise external Figure focus Government Internal Audit guidance heads of internal HM Treasury individual internal audit influence senior colleagues Institute of Internal internal audit added internal audit functions internal audit needs internal audit plans internal audit service internal audit staff Internal Audit Standards Internal Audit Transformation internal audit users issues key performance indicators key stakeholders National Audit Office number of audit objective assurance Ofcom operating model outsourced Percentage performance metrics professional providing assurance public bodies quality assurance recognise relevance reviews of internal right capabilities risk management role of internal senior management stakeholders and heads strategic sufficiently Treasury’s Internal Audit Type 45 destroyers value for money