The Institute of Internal Auditors defines internal audit as “an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance process”. As businesses become more complex and diversified, the scope of responsibilities for internal auditors have expanded significantly with increasing reliance being placed by stakeholders on the assessment undertaken by the internal auditors.
The need for an independent internal audit function is set out in the Securities and Futures (Licensing and Conduct of Business) Regulations and highlighted in MAS Guidelines on Risk Management Practices – Internal Controls. The concept of maintaining the highest level of independence and objectivity is critical to the conduct of an effective internal audit and this can be achieved through ensuring the internal audit function have these key conditions in place:
Direct reporting access to the Audit Committee, CEO or its equivalent where applicable;
Unrestricted access to all organizational resources and documentations;
Sufficient authority to ensure broad audit coverage and appropriate action on recommendations; and
No other operational responsibilities besides that of internal audit.
Outsourcing of the internal audit function can be viewed an alternative and there are many advantages associated with it. Some key ones are:
Qualified personnel from outside the organization that are objective and unbiased
More cost and time effective, freeing up internal resources and the need to have continuous investment in maintaining an in-house team.
Ability to draw on the outsourced provider’s broad experience across the industry for valued findings and “best practices” recommendations.
At Lymon, we have been providing internal audit services independently to fund managers since 2013. The capabilities and collective knowledge that we are able to access and deploy can deliver sharp and objective insights to our clients.
To find out more about our internal audit service offerings, please do not hesitate to reach out to your usual contact at Lymon or our specialist below:
Jovi Gan, Director
+65 6709 4110