MEASURING SUCCESS

Internal Audit Performance

Measures

Internal Audit Performance

Measures

• Why should we measure performance

• Differing Approaches

• What we are currently doing

• Next Steps

Why

• Internal Audit is like any other business

unit

• Increasing requirement to report regularly

against agreed performance measures

Differing Approaches

• Traditional Approach

• Balanced Scorecard Approach

Traditional Approach

• Typical Measures

– Audit Plan Delivery

– Timing of Draft and

Final Reports

– Quality of Service

– Financial Indicators

Pros

•Measuring

the same

things

•Peer

comparison

easier

Cons

•Records the

past

•Doesn’t

consider

strategic

considerations

• However, some unanswered questions:– How well are stakeholder expectations being met by Internal Audit

– How are the performance objectives of staff linked to those of the overall

function?

Balanced Scorecard Approach

• Stakeholder

• Customer

• Internal Process

• Innovation, Learning

and Growth

• Vision and Strategy

• List here.

Balanced Scorecard for Internal Auditing

Board/Audit Committee

OBJECTIVES MEASURES

• List here.

• List here.

Management/Audit Customers

OBJECTIVES MEASURES

• List here.

• List here

Innovation/Capabilities

OBJECTIVES MEASURES

• List here.

• List here.

Internal Audit Processes

OBJECTIVES MEASURES

• List here.

INTERNAL AUDIT

STRATEGY

CORPORATE

STRATEGY

• Experience

• Education

• Training

• Certification

• Reporting Relationships

• Expectations

• Perspective on IA Roles

• Satisfaction Surveys

• Requests

• Complaints

• Importance Levels

• Improvements

• Findings

• Repeat Findings

• Savings

• Quality Assessment

• Perspective on IA Roles

• Satisfaction Surveys

• Risk Concerns

• CAE/AC Private Meetings

Status Performance Indicator DescriptionCurrent

Target

Current

Value

Last

Update

IA001_6a.1 Timeliness of

Audit Report..

% of respondents who agreed

that the audit report was

produced timeously

100% 100%Q4

2010/11

IA002_6a.2 Audit Report

Delivered..

% of respondents who agreed

that the audit remit was

addressed by the audit

report .

100% 93%Q4

2010/11

IA003_6a.3 Kept Informed of

Audit Progress..

% of respondents who agreed

that Internal Audit kept them

informed of progress.

100% 93%Q4

2010/11

Current Reporting - Covalent• Example Measures:

– Customer Results

– Efficiency

– Effectiveness

– People

Current Reporting - WordNo Indicator/Description Measurement 09/10 10-11

1 Audit Plan Delivery

Actual number of audits delivered against

planned number of audits on the audit

plan.

actual plan completion v

planned completion

115% 100%

2 Reporting

Issue of draft report after completion of

fieldwork.

% of draft reports issued

within 15 working days of

fieldwork completion.

100% 100%

3 Reporting

Issue of final report after management

response to draft received.

% of final reports issued

within 5 working days of

management response

being received.

100% 100%

4 Quality

Customer feedback survey responses with

either a satisfied or very satisfied rating.

Target 80% of satisfied or

very satisfied customer

feedback responses

96% 96%

5 Quality

Number of actions implemented by due

date.

Target 80% of actions

completed by management

when due.

85% 61%

6 Quality

Number of audits completed within

planned time budget.

Target 75% of total audit

assignments to be

completed within planned

time budget.

91% 85%

Next Steps

• Agreement on approach and standard

areas for setting performance measures

• Is there a need for Working Group?