An External Quality Assessment can help identify an audit function’s blind spots, such as gaps in risk management.
With the growing appreciation of the internal audit function in recent years, many organizations have fully embraced internal audit, ensuring their teams are well staffed and funded.
If you are a CAE, your job involves focusing on the risks within the audit universe and allocating your resources to provide insights on the effectiveness and efficiency of the operations under review. You and your internal audit team are likely doing a good job of helping your organization achieve its objectives through your assessments and insights on how governance, risk management, and controls can be further enhanced. Perhaps the board and management are happy with your work, as reflected in your engagement reports and quarterly and annual progress reports.
To ensure that your work is optimized, an important next step is to invite an objective, knowledgeable third party to assess the function itself, providing insight into how well you and your team are performing compared to the requirements of the Global Internal Audit Standards. That external outsider’s evaluation of your activities and performance is what is referred to as the External Quality Assessment (EQA).
Both the new and old Standards require that every internal audit function have an EQA at least once every five years. EQAs provide an objective assessment of the function’s effectiveness and efficiency and can help identify areas for improvement.