Yes, internal audit functions can absolutely be outsourced, and it's a very common and effective strategy used by organizations of all sizes, from mid-sized companies to large, publicly traded corporations. Bookkeeping Services in Baltimore.
Outsourcing internal audit falls into two main models: full outsourcing or co-sourcing.
1. Full Outsourcing
In this model, a company contracts with an external professional services firm (like a large accounting or specialized consulting firm) to manage and execute the entire internal audit plan.
How it Works: The external firm assumes full responsibility for planning the audit scope, executing the fieldwork, reporting findings to management and the audit committee, and following up on corrective actions.
Best For:
Smaller Companies: Those that cannot justify the cost of hiring a full, dedicated internal audit department.
Companies Needing Immediate Expertise: Those facing specific, complex risks (e.g., cybersecurity or international compliance) that their current staff lacks expertise in.
2. Co-sourcing (Partial Outsourcing)
Co-sourcing is the most popular model, involving a partnership between the company's internal audit staff and an external firm.
How it Works: The company maintains a small, core internal audit team, but outsources specific, complex, or resource-intensive segments of the audit plan to specialists.
The External Firm Provides:
Specialized Skills: Expertise in areas like IT auditing, data analytics, fraud investigation, or Sarbanes-Oxley (SOX) compliance.
Temporary Staff Augmentation: Extra human resources during peak audit periods or when the in-house team is understaffed.
Best For:
Large Companies: Those that want to maintain institutional knowledge and control but need to inject specialized skills on demand.
Companies Seeking Efficiency: Those that want to perform routine audits internally while relying on experts for technical or complex reviews.
In short, whether you need full strategic coverage or just a boost of specialized help, internal audit is a highly flexible function that can be tailored through outsourcing.
