a. TWO other reasons for outsourcing the internal audit function.

i. It may be more cost effective to outsource rather than employ internal auditors full time, especially if the entity is small;

ii. Recruiting and retaining suitably qualified staff may be difficult for some entities;

iii. An entity may face a short-term need for internal audit, for example, to perform a specific project; and

iv. An entity may operate in a sector or have business processes which require highly specialised knowledge or skills.

b.  SIX advantages of outsourcing the internal audit function.

i. There will be no need to recruit and train staff;

ii. Staff will be fully trained and will be aware of up to date best practice;

iii. An established firm is more likely to be able to use sophisticated technology;

iv. The outsourcing entity will have instant access to specialists as and when required;

v. It may be more cost effective;

vi. It eliminates a potential conflict between the monitoring and review roles of internal audit;

vii. There may be a high level of independence; and

viii. It can be for a specific time or for specific projects.

c.  FIVE problems of outsourcing the internal audit function.

i. It may be more expensive than an in-house function;

ii. The outsourced staff may change from time to time leading to a lack of continuity;

iii. Outsourced staff may lack knowledge and experience of the industry sector;

iv. The entity may become over reliant on the outsourcing entity;

v. There may be a perceived lack of independence if the external auditor provides the service; and

vi. There is a risk that the quality of the work is not of an appropriate standard.