Measuring the Efficiency and the Effectiveness of IAA

Sumber: IPPF Practice Guide: Measuiring Internal Audit Effectiveness and Efficiency

Definisi Efektifitas dan Efisiensi Internal Audit

Deskripsi umum dari efektifitas dan efisiensi adalah “tingkat (termasuk kualitas) dimana tujuan-tujuan yang ditetapkan, tercapai”. Deskripsi yang sama dapat digunakan untuk efektifitias dan efisiensi internal audit. Internal audit seharusnya membangun ukuran kinerja dan kriteria pengukuran bagi lingkungan/ aktivitasnya, untuk mengukur tingkat (termasuk kualitas) pencapaian tujuan-tujuan yang ditetapkan bagi aktivitas internal audit (IAA).
Efektifitas dan efisiensi internal audit seharusnya dimonitor dan dievaluasi secara periodik, sebagai bagian dari proses internal audit.

Measuring the Efficiency and the Effectiveness of IAA

Metriks/Ukuran Efektifitas dan Efisiensi Kinerja Internal Audit.

Internal Audit harus secara efektif menunjukan nilainya, sebagai komponen penting dari kerangka governance organisasi. Aktivitas audit dapat memimpin dengan memberi contoh bagaimana ukuran kinerja yang tepat, relevan, dan reliabel.
Proses Pengukuran Kinerja
Untuk menciptakan ukuran kinerja, Kepala SPI (CAE) perlu membangun suatu proses untuk:

• Identifikasi kategori kinerja utama, seperti kepuasan stakeholder, proses internal audit, dan inovasi dan kapabilitas.

• Identifikasi kategori strategi dan ukuran kinerja. Strategi seharusnya mempertimbangkan kepatuhan terhadap Standar IIA, standar profesional terkait, dan aturan dan hukum terkait, serta menjamin kepuasan stakeholder. Penggunaan ukuran kinerja dapat berupa suatu elemen dari proses internal assessment atas IAA, terkait kepatuhan terhadap Standard IIA.

• Secara rutin memonitor, menganalisis, dan melaporkan ukuran kinerja.

Proses tersebut dapat mengikuti langkah-langkah, sebagai berikut:
1. Mendefinisikan Efektifitas Internal Audit.

• Review IPPF guidance yang relevan, termasuk Standards.
• Review rencana strategis IAA dan organisasi.
• Review piagam/ charter dewan komisaris /pengawas, komite audit, dan IAA.
• Menilai dasar, ekspektasi, dan target/harapan dari hasil/produk IAA.
• Formulasikan definisi awal dari efektifitas dan efisiensi internal audit.
• Definisikan kesepakatan dari stakeholder utama, terkait definisi efektifitas dan efisiensi.

2. Identifikasi Stakeholder Utama dari Internal dan Eksternal

• Tentukan stakeholder internal dan eksternal bagi IAA dan organisasi.
• Tentukan pihak-2 yang secara langsung atau tidak langsung, mengandalkan kepada hasil kerja IAA.
• Tentukan pihak-2 yang mendapatkan manfaat, secara langsung atau tidak langsung, dari hasil kerja IAA.
• Pertimbangkan pihak-2 yang mendukung IAA.

3. Membangun Ukuran Efektifitas Internal Audit

• Pahami ekspektasi stakeholder terhadap IAA.
• Pahami atribut, hasil/produk, dan Understand what internal audit attributes, deliverables, and capabilities key stakeholders value and related shortcomings or advancements in these areas.
• Kembangkan alat ukur seperti BSC (balanced scorecard) to document relevant attributes of effectiveness and effi ciency and related performance against these.
• Sepakati dengan stakeholder, terkait dengan metrik efektifitas dan efisiensi.

4. Monitor dan Melaporkan Hasil Kinerja

• Buat kesepakatan format dan frekuensi untuk pelaporan, yang mempertimbangkan ukuran, sifat, dan struktur governance dari organisasi.
• Buat reviu periodik terhadap kegiatan monitoring dan pelaporan, untuk menjamin relevansi, efisiensi, dan efektifitas.
• Gunakan hasil pelaporan untuk memperkuat dan memandu IAA.
• Align-kan aktivitas internal audit ke ukuran-ukuran yang ditetapkan untuk efektifitas dan efisiensi.

Categories of Performance Information for Internal Auditing

IAA seharusnya mengidentifikasi kategori ukuran kinerja kunci, seperti kepuasan stakeholder, proses audit, dan inovasi dan kapabilitas internal audit. Proses audit dapat termasuk penilaian risiko, perencanaan, metodologi audit. Inovasi dan kapabilitas dapat termasuk efektifitas pemanfaatan teknologi, pelatihan, dan pengetahuan tentang industri.
Ketika membangun ukuran kinerja, IAA seharusnya mempertimbangkan:

• Seberapa efektif ukuran kinerja dikaitrkan dengan strategi IAA?
• Apakah ukuran kinerja termasuk indikator leading dan lagging?
• Apakah ukuran kinerja menggambarkan mandat dan peranan IAA?
• Seberapa efektif ukuran kinerja digunkan untuk perbaikan berkelanjutan?

Metrik kinerja dapat dibangun sejalan dengan dimensi, kepentingan, dan perspektif dari berbagai stakeholder. Setiap perspektif akan termasuk ukuran-ukuran.

IAA Effectiveness Perspective

Characteristics of Performance Measures:

Quantitative vs. Qualitative

Metrik kuantitatif dan kualitatif keduanya penting dalam menunjukan kinerja IAA kepada stakeholder, dan keduanya dapat di-benchmark terhadap standar yang diacu, kinerja sebelumnya, dan/ atau ekspektasi yang disetujui.

• Quantitative performance metrics sering berdasarkan data yang ada atau yang dapat diperoleh, dan mudah dimengerti (seperti persentase realisasi v.s. rencana audit). Metrik kuantitatif membutuhkan usaha sedikit untuk mengumpulkan datanya dan dapat dibanding  dengan metrik yang sama dengan organisasi lainnya.

• Qualitative metrics sering berdasarkan pengumpulan informasi yang unik, dengan are often based on the collection of unique information through more time intensive methods such as survey research or interviews. They offer a broad view of performance on a range of topics that can provide depth to quantitative metrics

Specific Measures

In addition to compliance with the Standards, internal auditing’s performance measurement objectives may include:
level of contribution to the improvement of risk management and control and governance processes; achievement of key goals and objectives assigned; evaluation of progress against audit plan; staff productivity; costefficiency of the audit process, number of action plans for process improvements; effectiveness in meeting the needs of stakeholders; and the sufficiency of quality assurance reviews.

Monitoring and reporting results

Internal auditing’s effectiveness and efficiency should be reported to its stakeholders periodically. The CAE should obtain feedback from key stakeholders on internal auditing’s effectiveness and efficiency in reporting (e.g., format, timing, metrics) and make efforts to align reporting to their needs.

• Contents: What should be reported varies based on stakeholder requirements and the organization’s specific needs.

A good practice is to survey key stakeholders to determine their needs and expectations, which then helps defi ne the criteria upon which internal auditing should be measured.

• Type of reporting: The CAE should evaluate stakeholders to whom reporting is required and customize the reporting package to their individual needs.

• Frequency: The frequency of reporting should be based on stakeholder needs. Quarterly reporting on internal audit effectiveness and efficiency could be a good starting point.

• Format: Standards for reporting internal audit effectiveness and efficiency should be similar to standards followed for reporting other audit-related information. There are many formats for reporting, including Word, PowerPoint, dashboards based on automated tools, and e-mail. The chosen format should be tailored to meet stakeholders’ specific needs. For example, reporting to the board might be less frequent and in less detail to meet its needs in overseeing the activities of internal auditing. Reporting to management would likely be much more detailed.

Consistent processes are needed for gathering, summarizing, and analyzing measurement data. Responsibility for performing and validating measurement data should be established similar to any other audit engagement.
The CAE may consider periodic benchmarking of its current metrics and criteria with those being used by peer organizations. This can help ensure current and appropriate criteria are in place for measuring internal auditing’s effectiveness and efficiency.

Questions that Should be Answered to Adequately Gauge and Provide to Varied Stakeholders Reasonable Assurance of Internal Audit Quality

Source: www.theiia.org/guidance/quality. Under Advocacy, click on The Audit Committee: Internal Audit Oversight

1. Does the internal audit activity have a quality assurance and improvement program?
2. Has the activity performed its work in accordance with its charter?
3. Do the internal auditors adhere to The IIA’s Code of Ethics?
4. Are internal audits conducted in conformance with The International Standards for the Professional Practice of Internal Auditing?
5. Does the activity operate effectively and efficiently?
6. Is the staff size adequate?
7. Are the existing skill sets appropriate?
8. Does the activity contribute to the improvement of organizational operations, and is it perceived by stakeholders to add value?
9. Does the activity have the tools and other resources it needs?
10. Does the activity engage in ongoing internal reviews and analysis of supervision, documentation, policies, and procedures?
11. Does the activity engage in periodic reviews that include customer surveys, risk assessments, workpaper reviews, analysis of performance metrics, and best-practice benchmarking?
12. Do members of the team participate in professional development training?
13. Have team members acquired professional designations that demonstrate their competency.
14. Has the internal audit activity obtained an independent external quality assessment within the past fi ve years?

Examples of Internal Audit Effectiveness and Efficiency Metrics

IAA Effectiveness Metrics 1

IAA Effectiveness Metrics 2

Example of Reporting Internal Audit Effectiveness and Efficiency Dashboard

IAA Effectiveness Dashboard