Internal audit outsourcing
Many businesses need an internal audit function but cannot justify a full department. A partner firm can run internal audit for you, or work alongside your own staff. Fairview Audit connects you with that firm.
Fairview does not perform any audit work itself.
What the work looks at
Internal audit is an independent, objective activity that evaluates and helps improve risk management, controls and governance. It reports to management, the board or the audit committee. It is separate from the external audit of your financial statements.
There are two common arrangements.
- Outsourced: a partner firm acts as your internal audit function, from planning through reporting.
- Co-sourced: a partner firm shares the work with your own internal audit staff, often for specialist skills, extra capacity or a special project.
Typical subjects include:
- Procure-to-pay and approval controls
- Payroll and expense processes
- Revenue recording and billing
- Cash handling and bank reconciliations
- Inventory and asset controls
- IT access and change management
- Policy compliance and risk assessment
The firm normally starts with a risk assessment and a plan that you approve. [CONFIRM: a partner firm supplies and approves its standard approach to internal audit planning]
What you provide
Your partner firm will ask for material that shows how your business runs.
- Organization charts and a list of key processes
- Existing policies, procedures and approval limits
- Prior audit reports, management letters and open findings
- Your risk register, if you keep one
- Recent financial statements and budgets
- Access to system reports and the people who run each process
- Any areas of concern you already know about
You do not need perfect documentation. If a process is undocumented, the firm can often help describe it as part of the work.
What happens after you submit a request
- You submit a request on the path that fits your business.
- A partner firm contacts you to learn about your operations, your board's expectations and the areas of most concern.
- You agree on scope and reporting lines with the firm.
- You share documents and give the firm access to people and records.
- The firm reports findings and recommendations to you. Management then responds, and the firm may follow up later to see what changed.
The engagement and any fees are between you and the partner firm under the firm's own terms.
Who it suits and how matching works
This service suits boards and audit committees that want independent assurance, controllers who need extra capacity, and growing businesses that lack an internal audit team. It also suits organizations that need a one-off review of a single process.
Fairview offers three request paths: larger business, smaller business, or not sure or another need. There is no fixed size cut-off. Fairview matches each request by hand. Each path leads to its own form: larger business, smaller business or not sure. Your request goes to the matched partner firm, or to Fairview for manual matching on the not sure path. You then speak with the firm directly.
An independent partner firm that specializes in internal audit outsourcing handles this work. Fairview Audit makes the match. We do not perform the review ourselves.Who does the work
Frequently asked questions
What is the difference between internal and external audit?
External audit gives an opinion on your financial statements for outside readers such as lenders and regulators. Internal audit looks at controls, processes and risk for management and the board.
Can my external auditor also run my internal audit?
Professional guidance generally points to using a different firm for internal audit than the one that audits your statements. Independence rules may also restrict it. Ask the firm how it handles the issue. [VERIFY: current independence rules that apply to your entity]
Do we lose control of the function if we outsource it?
No. Responsibility for internal audit stays with your board, through its audit committee, and with management. They approve the plan, receive the reports and decide what to act on. The firm does the testing.
Can we start with one project?
Many businesses begin with a single process review. Ask the partner firm whether it takes limited engagements.
Related pages
- Services overview
- Financial statement audit and review
- SOC reporting
- Accounts payable audit
- Supplier contract compliance
Tell us what you need reviewed. We match you by hand with an independent partner firm. You keep your existing vendors.Find out what you are overpaying.