To some internal audit leaders, an external quality assessment review (QAR) might not seem a sufficient reward for the effort invested. At best it could be viewed, as a disturbance in routine and simply a check-the-box exercise. At worst, it could be seen as an opening to find fault within the internal audit department (IAD) and a costly outlay of limited funds. But the results can prove to be quite the opposite, well worth the cost, and with benefits to both the organization and IAD. QAR: Navigating the process, reaping the benefits (PDF) reports on requirements and provides guidance for IA to facilitate a meaningful QAR.
“The process and results of an internal audit quality assessment review can be similar to various hospital accreditations, such as The Joint Commission.”
-Mike Fabrizius, Vice President of Audit Services, Carolinas HealthCare System
Quality and value have become critical success factors for health care organizations. Clinical activities are focused on making services more patient-oriented, reliable, accessible, efficient and safe. Within health care, value is replacing volume as the preferred basis for reimbursement.
These two factors — quality and value — contribute to success in the IAD, as well. An IAD is expected to provide reasonable assurance and positive change; add value; be insightful, proactive and future-focused; and achieve efficiency and effectiveness. While not easily measured, quality and value offer the accepted perspective for evaluating the performance of an IAD. Guidance along these lines comes from the International Professional Practices Framework
of the Institute of Internal Auditors (IIA), which considers quality and value as the profession’s key principles.
Demonstrating conformance with the IIA's International Standards for the Professional Practice of Internal Auditing
(the Standards) assures stakeholders that activities are conducted in a quality and professional manner, and that they provide value. The steps in a QAR are much like those in hospital accreditation — described in the IIA's Practice Guide: Quality Assurance and Improvement Program
as “…a self-assessment and external peer assessment process used by healthcare organizations to accurately assess their level of performance in relation to established standards and to implement ways to continuously improve.”
Mike Fabrizius, vice president of audit services at Carolinas HealthCare System, agrees: “The process and results of an internal audit quality assessment review can be similar to various hospital accreditations, such as The Joint Commission.” Accreditation is accepted as an important element of quality improvement activities. It confers a level of confidence about competence, organization and performance.
Efficiency and credibility reflect on IAD
A QAR assesses the efficiency and effectiveness of the internal audit activity in light of its charter and expectations of the board, executive management and the chief audit executive (CAE). The QAR process also identifies opportunities and offers ideas and counsel to the CAE and staff for improving performance and increasing the value they can add to the organization.
Notes Bailey Jordan, Grant Thornton LLP’s Governance, Risk and Compliance practice leader in the Mid-South market territory: “Assurance of IAD’s performance assists management and the board in fulfilling their risk management and risk oversight responsibilities, respectively.”
“Assurance of IAD’s performance assists management and the board in fulfilling their risk management and risk oversight responsibilities, respectively.”
-Bailey Jordan, Practice Leader, Governance, Risk and Compliance, Mid-South, Grant Thornton
Jordan describes the potential benefits of the QAR process: “Beyond confirming conformance with the Standards, a QAR can offer trends and leading practices that potentially further the value of the IAD.”
requirements for a quality assurance and improvement program, assessments and monitoring, and how IA can help improve its organization’s operations and assure that IA activity conforms to IIA standards and code of ethics. See how to help facilitate a meaningful QAR for your organization.
Download the full report (PDF).
The Association of Healthcare Internal Auditors has formally adopted the IIA Standards for health care internal auditing.
Vice President of Audit Services
Carolinas HealthCare System
Mike Fabrizius is an active member of the Association of Healthcare Internal Auditors (AHIA), including service as chairman of the board of directors.
Grant Thornton LLP
Governance, Risk and Compliance
Advisory Services, Southeast
+1 919 881 2790
Bailey Jordan consults with clients on their challenges including enterprise risk management, internal audit co-sourcing and outsourcing, quality assurance reviews, internal audit transformation, and Sarbanes-Oxley Act compliance.