PROFESSIONAL CONSULTING SERVICES PERFORMED BY INTERNAL AUDIT

BY:MOHAMMAD WAHID ABDULLAH KHAN

Summary: the international standards for the Professional Practice of Internal Auditing defines internal auditing as a "consulting activity," but how many internal auditors have ever really studied what it takes to be an effective consultant? Internal auditors may recommend change with their internal audit reports, but can they "influence" change in other ways? I have describe the auditor professional consulting services

 

The concept of internal auditors acting as consultants within the companies that employ them or contract with their external firms seems to be a natural use of resources which may have company-wide depth and breadth of knowledge to perform such services in a beneficial manner to the client. The question is whether such consulting services affect or violate the independence of the internal auditors who may eventually be auditing areas, policies, procedures, controls or any other functions for which they advised company management.

The definition of internal auditing makes it clear that it is an assurance and consulting activity. The IIA has defined an assurance service as: ‘An objective examination of evidence for the purpose of providing an independent assessment of risk management, control, or governance processes for the organization. Examples may include financial, compliance, systems security, and due diligence engagements.’ While consulting services are defined as: ‘Advisory and related client service activities,

The role of internal audit is evolving due to economic conditions, increased globalization, and new and emerging risks. These scenarios are creating a dynamic environment – and a new opportunity for internal audit to demonstrate its value. In this fluid environment, many companies are struggling to manage – and sometimes, even to identify – they face the complex risks

Definition for professional consulting services as follows:

“Advisory and related client service activities, the nature and scope of which are agreed with the client, are intended to add value and improve an organization’s governance, risk management, and control processes without the internal auditor assuming management responsibility. Examples include counsel, advice, facilitation, and training.

 Assurance work is well understood by the internal audit community and over the years there has been ‘creeping consulting’ normally in the form of advice and information on request from the line managers. What has not happened before is the offer of a formal consulting service based around the corporate governance, risk management and control dimensions. Many auditors simply suggest that they will do more consulting work, but may not appreciate that this is an entire industry, with set standards and methods, many of which are similar to internal audit techniques.

The professional internal auditors are numerous areas of guidance provided specifically for consulting services which must be addressed including:

• Audit charter considerations

• Inclusion in the audit plan

• Objectivity and independence

• Impairment of independence

• Proficiency of staff

• Due professional care

• Appropriate planning including objectives and scope

• Alignment with corporate goals

• Identification of risks and controls

• Work programs

• Documentation retention and access

• Communication of results

If the internal audit staff follow and comply with the mandatory standards related to consulting services, as well as any other standards applicable to all services provided by internal audit, there should be no issues providing consulting services to clients. As with any engagement, clear communication before, during and after, as well as appropriate planning and scope definition, should help ensure that the services result in a beneficial and satisfactory ,

Conclusion: Internal auditors are typically adept at executing the technical aspects of planning, performing, and reporting on their audit work. They sometimes struggle, however, with the softer skills related to communicating effectively with clients, establishing credibility, and overcoming resistance. Although internal auditing is a discipline related to consulting, auditors often overlook or are unfamiliar with the skills that professional consultants may use to interact effectively with their clients and deliver the services that their clients want and deserve

About the Author

MOHAMMAD WAHID ABDULLAH KHAN

S/O MOHAMMAD SAADULLAH KHAN

Dhaka, Bangladesh

Mr. Mohammad Wahid Abdullah Khan is the Project director of “Max Textiles Ltd”.Mr. Wahid has been in accounting field since 1999. Prior to that he had completed over ten (10) years in various fields of Business like - Accounts, Finance, Internal & External Audit, project budgeting and project costing related positions in some of the largest group companies & the join venture companies in Bangladesh.

He consults about small- medium business owners and services professionals, business consulting service and project process. He is most experience in Financial Risk Assessment, Financial analysis, Financial Advising and Project Cost Analysis. He has published more than 200 articles & case study in different international journals. Such as Business, finance, personal finance, international finance, auditing, Risk assessment topic and performance & industrial related,

Mr. khan’s most popular articles is  “WAK” Model - The way of best solution for an organization internal audit process,( 1st,2nd,& 3rd part)  “WAK” Model”- for successful financial resource , “Wahid khan”- cost analysis, Wahid theory – the key of dynamic series for successful financial consulting, Wahid techniques – the Significance and dependability manner for Performance audit(1st,2nd,& 3rd part) Wahid’s Opinion - non-conformity among the performance audit and financial audit, Wahid’s view- The cogent task and the confront of financial/economic analysis in the modern business decision making , Wahid’s outlook - The Business Financial Analysis Should Be Included several required Documents with the analysis report or plan, WAHID’S JUDGMENT- difference strategic plan as opposed to an operational plan ,WAHID’S METHOD– the charismatic and fruitful guideline for financial investment decision making ,WAHID’S MEASURE - the influential and evaluated of similarity between profit & non- profit business planning & Wahid’s philosophy- The examined & careful consideration of strategic planning against business planning,&  PPBS MODEL,

He has consulted with more than 30 service & product companies, in recent years Mr. Khan has been spending most of his professional time for financial consulting, Mr. Wahid is the owner of “WAM Associates” and “WAK business solutions”

Source & Published: articlesbase.com

N: B- This services has given by Mohammad Wahid Abdullah khan