White Paper – PWC – A Practical Approach to Measuring Internal Audit Performance

PWC Internal Audit MetricsMetrics by Design – A practical approach to measuring internal audit performance (September 2014)

Drawing from their annual survey, they quoted the following statistics:

Overall, senior management believes Internal Audit performance should improve. We found that only 63% of senior management believes Internal Audit is performing well at focusing on critical risks, only 50% believe they are delivering cost effective services and a mere 36% believe Internal Audit is leveraging technology effectively. tweet

The whitepaper details and ties in two core concepts: 1) The PWC Internal Audit Operating Continuum (Assurance Provider, Problem Solver, Insight Generator, and Trusted Advisor) and 2) four key metrics (Process effectiveness, People, Risk coverage, and Value). These two items are combined into a balanced scorecard.

The PWC Internal Audit Operating Continuum is new to me. I have been meditating on it and how it relates to what I’m doing with regard to value identification and measurement. I took some time to overlay their model with my Internal Audit Value Levels and here is the hybred-model I’ve developed:

Level Type of Activity PWC IA Operating Continuum
1 Recovery Assurance Provider
2 Reliance
3 Cycled Audit
Problem Solver
4 Risked Audit
Insight Generator
5 Management Request
Trusted Advisor
6 Strategic

It is a short, but very valuable white paper.  I’d advise you to read through it when you’re ready to start building out metrics for your function.

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