Definition Key Performance Indicators (KPI) for Internal Audit System

V

VivieH

#1
Please can anyone help with the definition of some Key Performance Indicators for an Internal Audit System

Regards


VivieH
 
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Colin

Quite Involved in Discussions
#2
Re: Key Performance Indicators for Audit System

When looking to set KPI's for a process I try to identify what is important to that process. In the case of internal audits perhaps adherence to the audit programme (e.g. how many audits not done to programme), close out of NC's on time come to mind.

I don't think I would go along the route of counting the number of NC's raised as that will make people 'defend their patch' if they are getting near to the maximum rather than accept an NC which may be valid.
 
#3
Re: Key Performance Indicators for Audit System

I'd recommend doing a search - this topic has been rubbed and scrubbed here countless times...................warning, it's a contentious issue!
 

Jim Wynne

Staff member
Admin
#4
Re: Key Performance Indicators for Audit System

Please can anyone help with the definition of some Key Performance Indicators for an Internal Audit System

Regards


VivieH
When a process such as internal auditing is being designed, the efficacy of the design is dependent on having a firm understanding of what the process is supposed to accomplish--design intent. When you know what the process is supposed to do, you also know what to measure. What do you expect of your internal audit process?
 

Stijloor

Staff member
Super Moderator
#5
Re: Key Performance Indicators for Audit System

I'd recommend doing a search - this topic has been rubbed and scrubbed here countless times...................warning, it's a contentious issue!
Andy is correct, "rubbed and scrubbed", there's no skin left....:D

Stijloor.
 

Marcelo

Inactive Registered Visitor
#6
Re: Key Performance Indicators for Audit System

Try to define the output your internal audit process - why are doing it? 4 or 5 points are ok, thendefine the KPI based on these points. Rememeber that the proces approach is all about the outcomes of process.. treat your internal audit system just like any other processes (a shame people in general tend to focus their KPIs in meaningless details which in general have no impact on process output :-()
 
Last edited:

Randy

Super Moderator
#7
Re: Key Performance Indicators for Internal Audit System

This has been tossed around more than once:lol:

I'll just reinforce a personal feeling though........

The Internal Audit has to be a value added process for the organization and primarily for Top Management...the audit is of course performed to meet the needs of Top Management within the system.

A very important KPI that is often misunderstood and totally neglected in many cases are what we call a Preventive Action or Opportunity For Improvement. From the proper identification and management of PA's and OFI's we can see and gain benefit or value.

Always focus on the "What are we doing correct", "How can we keep it from breaking?" and "How can we do it better?"
 

Raffy

Quite Involved in Discussions
#8
Re: Key Performance Indicators for Internal Audit System

Hi VivieH, :bigwave:
In our company right now, what is being measured by our internal auditor is the closure rate of internal audit report issued. The definition of IQA Audit Action Item Efficiency is the measure of effeciency in addressing action items on IQA Audits. Formula used: No. of closed IQA Report Per Month / The Total Number of IQA Report Issued.
In this regard, I am recommending to consider the following KPI's: Completed versus planned; audit cycle times; % responsiveness; overdue finding responses.
Hope this help.
Best regards,
Raffy :cool:
 
R

rizsa

#9
Re: Key Performance Indicators for Internal Audit System

Can somebody help to understand the KPI based audit approach.If some one can provide some guideline ,it will be great.
 

Colin

Quite Involved in Discussions
#10
Re: Key Performance Indicators for Internal Audit System

ISO 9001 requires the organisation to establish quality objectives at 'relevant functions and levels' (5.4.1) and also to 'monitor and measure' processes (8.2.3). In addition, clause 8.2.2 requires internal audits to be conducted, part of which is to verify that processes are 'effectively implemented and maintained'.

Many organisations audit purely for conformance i.e. does the practice meet the procedure - which is fine, but has limited value over time. So we encourage internal auditors to look beyond conformance and try to include an element of verification that not only are we doing what the procedure said, but is it helping us to achieve our objectives.

Obviously, we need some objectives to check against and this is where KPI's come into it. Many organisations do have departmental KPI's, if not, some can be created and we ask the internal auditor to use these as part of the audit criteria.

As for the internal audit processes itself, just like any other process it should be able to be measured for effectiveness too.
 
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