IIA Chief Executive, Dr Ian Peters, has commented on the IIA's position on internal audit outsourcing to external audit firms, saying:

"Whilst the IIA does not comment on the decisions and actions of individual companies, recent reports of firms providing both external and internal audit services to the same client raise important issues in relation to corporate governance."

It has long been the Institute’s position that effective internal audit must be kept separate from external audit. This is necessary to ensure that the appropriate checks and balances are in place to support the highest standards of corporate governance. Internal auditors answer to management and the Non Executive Directors, providing assurance and important insights to help them oversee the management of all types of risks facing an organisation, not just financial reporting risks. External audit reports to shareholders, enhancing the value of the annual accounts. Merging these two important functions has the potential to cause serious conflicts of interest and reduce the effectiveness of internal controls and the management of risk."

There has been much recent debate about how improvements can be made to corporate governance structures. It is our belief that those improvements are only possible when internal audit is well resourced and able to maintain its independence."

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