Outsourcing triggers 'conflicts of interest' fears.
Concerns have been voiced over the increasing number of companies choosing to outsource their internal audit activities to accountancy firms.
As the trend grows, regulators and professional bodies are expressing fears over implications for internal audit quality and the potential for conflicts of interest.
‘There’s no doubt an effective inhouse team will have a better understanding of a company and a better relationship,’ said Gill Bolton, development adviser to the Institute of Internal Auditors.
David Brilliant, chairman of the English ICA’s internal audit committee, commented: ‘It would be difficult to get the same quality of service.’
But John Way, ICI’s head of internal audit disagrees. In April the chemical giant took the decision to offer the service to an outside firm – Ernst & Young – for the firm time, leaving him as the only member of the inhouse team.
He said: ‘It has been more cost-effective for us. But, the driver behind the decision was that we were keen to develop a consistently higher quality worldwide.’
Internal audit reforms