OUTSOURCING

MERITS OF
OUTSOURCING

FOCUS ON CORE COMPETENCIES

Allows management to focus on core
competencies instead of the day- to
day low payback activities.

COSTS
Reduces costs
by converting
fixed costs of
an
internal
audit function
to
variable
costs.

EFFICIENCY OF THE BUSINESS

Performing
quality checks
24/7
while
executing the
internal audit
activities

EXTERNAL AUDIT
Knowledge obtained
during the internal
audit
engagement
can
increase
the
efficiency
of
the
annual independent
statutory audit in
situations where the
external provider is
also
the
internal

BUSINESS GEOGRAPHICAL LOCATIONS

Business with numerous and remote locations

will benefit from outsourcing as more
locations can be reviewed and improves

FUTURE EXPECTATIONS

Existence of external provider

can be used as a training
ground for in-house internal
audit staff with specialized skills

CREDIBILITY
External provider with a good
reputation
carries
grater
credibility.

LIMITATIONS OF
OUTSOURCING

 Allegiance of in- house vs. external

service provider.
Culture of the organization towards the
external provider.
Sarbanes- Oxley Act 2002

 Incurring a large amount of resources

in the form of fees and time.
Lack

of

knowledge

organization
performance
activity.

will
of

about
affect

the

the
the

outsourced

 Lack of internal audit departments

may affect management succession
plans

Outsourcing

alternative

long- range development.

lacks

the