Today is a good day to establish and make known the contribution made by the internal auditor as a consultant in the organization. However, before continuing, we must recognize that Internal Auditors are professionals who possess the skills, experiences, qualities, and knowledge necessary to add value and improvements to the processes of governance, risk management and control in the organization.
In the meantime, we can mention that the contribution of the Internal Auditor as a consultant provides a viable alternative to the management to use its faculties to achieve the objectives of its organization, and promote good corporate governance. However, the nature and scope of consulting services are agreed with management.
The Internal Auditor must be faithfully diligent in maintaining his objectivity and independence in carrying out consultancy work. If there is any kind of situation that leads to an apparent conflict of interest, the latter must inform the management before accepting the work. Thus, avoid assuming and performing administrative and managerial functions and responsibilities.
However, we must consider that the emergence of the internal auditor as a consultant is due to his knowledge, skills, and experience in the administrative and operational area. In addition, fiscal situations, internal structural reorganizations and staff reductions have led management to rely on and seek the support of the internal auditor in the consulting service.
Here it is convenient to pause a moment in order to establish why the function of the internal auditor should be successful as a consultant, he must have the experience, the knowledge, the skill in the re-engineering processes, the ability to mediation, must have thought Strategic, as well as the ability to build consensus with parties to conflicts, and a creative and independent mind to solve problems.
Therefore, after establishing the importance of the role of the internal auditor as a consultant in the organization, we must consider that the Institute of Internal Auditors (IIA) defines the services that are consulted as “consultative activities And related to customer service without the internal auditor assuming managerial responsibilities. “According to the IIA, consulting services are by nature advice, recommendation, opinion, and suggestion), and are generally performed by Customer request, both internal and external.
On the other hand, the IIA indicates that there are two parties in the consulting services: the person or group that offers the board, that is, the internal auditor, and the person or group that seeks and receives the board, that is, the Client of the work. When performing consulting services, the internal auditor must maintain objectivity and not assume management responsibilities.
In the meantime, the “Government Accountability Office – General Accepted Governance Audit Standards (GAGAS)” describes this type of professional consulting service, as a service apart from audits and certifications, in other words, this kind of Sometimes called non-audit services or advisory services.
Consider GAGAS, section 2.12, establishes in relation to the consultancy, the following: GAGAS does not apply to non-audit services. The auditor will not report that non-audit services were conducted in accordance with GAGAS. The audit organization should inform and make clear to management that the consulting work performed does not constitute an audit in accordance with GAGAS.
GAGAS, section 2.13, establishes in relation to the consultancy, the following: When the audit organization provides non-audit services to the entity, for which it also provides audit under GAGAS, the auditor should evaluate the impact on the independence of the non-audit service provision of any identified threat to the entity. Independence in accordance with GAGAS. For more details regarding non-audit services, consider GAGAS, section 3.33 to 3.58.
In the same way, we can go to the International Standards for the IIA’s Internal Audit Practice, consider the Practice Council for consulting services, section:
1000. C1: The nature of the consulting services should be defined in the internal audit statute.
1130. C1: Internal auditors may provide consulting services related to operations for which they have previously been responsible.
1130. C2: If internal auditors have potential impediments to independence or objectivity related to the proposal of consulting services, this situation must be reported to the client before accepting the work.
1220.C1: The internal auditor must exercise due to professional care during a consulting work, taking into account the following: The needs and expectations of the clients, including the nature, opportunity, and communication of the results of the work. The relative complexity and extent of the task needed to meet the job objectives. The cost of consulting work in relation to the potential benefits.
2010. C1: The chief audit executive should consider the acceptance of proposed consulting work, based on the potential of the work to improve risk management, add value and improve the operations of the organization. Those works that have been accepted must be included in the plan.
For more details regarding consulting services, consider sections 2110.C1 and C2, 2120.C1 and C2, 2130.C1, 2201.C1, 2210.C1, 2220.C1, 2240.C1, 2330.C1, 2410 .C1, 2440.C1 and C2, 2500.C1 of the International Standards for the Professional Practice of Internal Audit, advice for practice.
Finally, there is no doubt that the internal auditor’s role as an internal consultant helps management create efficiency, reliability, and creativity in its operations. In addition, it adds value to the organizations giving a positive effect in;
• financial information,
• the accounting policy,
• the internal control system,
• the formulation of strategy and policies,
• compliance with the application of laws and regulations,
• management and control of risk in operations,
• ensures that management understands the scope definition in audits.
In other words, the internal auditor as a consultant is a great resource in the organization that can not be ignored to implement continuous improvements and achieve the most effective and efficient way of administration, in order to assure the interested parties, in general, good corporate governance.