Opal Ltd has had an internal audit function for 15 years. Until they retired three months ago, the Chief Internal Auditor (CIA) had been in post since the function was established. An interim replacement has been appointed. The function was always well resourced with a good number of professional and specialist staff. However, a number of staff left when the previous CIA retired and there are rumours that the remaining staff are dissatisfied with the appointment of a relatively inexperienced replacement, who is close friends with the Director of Finance. Due to the need for the organisation to make significant financial savings, the need for the internal audit function is greater than ever yet recent months have also seen increased resistance to, and criticism of, the recommendations made by the function. Senior management is now considering the best delivery model for the function. Explain two advantages and two disadvantages to Opal of outsourcing their internal audit function.
Opal Ltd has had an internal audit function for 15 years. Until they retired three months ago, the Chief Internal Auditor (CIA) had been in post since the function was established. An interim replacement has been appointed.
The function was always well resourced with a good number of professional and specialist staff. However, a number of staff left when the previous CIA retired and there are rumours that the remaining staff are dissatisfied with the appointment of a relatively inexperienced replacement, who is close friends with the Director of Finance.
Due to the need for the organisation to make significant financial savings, the need for the internal audit function is greater than ever yet recent months have also seen increased resistance to, and criticism of, the recommendations made by the function. Senior management is now considering the best delivery model for the function.
Explain two advantages and two disadvantages to Opal of outsourcing their internal audit function.
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