An external quality assessment, or EQA, evaluates conformance with the International Professional Practices Framework (IPPF) which includes the Code of Ethics, the Core Principles, the Definition of Internal Auditing and the International Standards for the Professional Practice of Internal Auditing (Standards). The assessment includes an evaluation of whether internal auditors apply the Code of Ethics. The assessment will also include conformance with the financial services code and the public sector standards (PSIAS) if you operate in these sectors.
Regardless of an organisation's industry or the internal audit activity's complexity or size, there are two recommended approaches to EQAs.
The first approach is an independent review team; this involves an outside team under the leadership of a knowledgeable and experienced professionally qualified internal auditor. The team members will be competent professional heads of internal audit who are well versed in best internal audit practices.
The second approach seeks out an independent and objective external 3rd party to validate the internal self-assessment and report completed by the internal audit activity. This approach brings in competent independent professionally qualified internal auditor(s) who are well versed in quality assessment methodology to validate the internal self-assessment of the internal audit activity. In addition to reviewing the self-assessment, the external assessor validates some of the work done by the self-assessment team, makes an on-site visit, interviews senior management and members of the audit committee, and either co-signs the heads of internal audit’s (HIA) report regarding conformance to the IPPF, or issues a separate report on the disparities.
In addition to enabling you to state that your IA activities "Conform with the International Professional Practices Framework", the EQA builds stakeholder confidence by documenting the internal audit function’s commitment to quality and best practices, and the internal auditors' mindset for professionalism. Obtaining an EQA also provides evidence to the board, audit committee, senior management and staff that the internal audit function is concerned about the organisation's internal controls, governance, and risk management processes.
Standard 1312 from the International Standards for the Professional Practice of Internal Auditing (Standards) contained in the Implementation Guide 1312 states:
An external assessment must be conducted at least once every five years by a qualified, independent assessor or assessment team from outside the organisation.
The chief audit executive / head of internal audit must discuss with the audit committee:
Our website details the requirements surrounding an EQA. To ensure your internal audit function conforms to the International Standards, regular independent external quality assessment is required. As the standard-setter, we’re ideally placed to conduct an EQA review of your operation. We also provide a checklist for an internal audit function to use when undertaking an internal quality assessment.
If you have not yet established a quality assurance and improvement programme, a good first step on the path to quality is to conduct an internal quality assessment.
There is a checklist available to members.
This will establish a benchmark of your internal audit activity that can be used to establish metrics. These metrics will indicate improvement in areas of partial conformance or non-conformance with the IPPF and the Standards.
It's important to remember that an EQA is not an audit of the auditors, but a review of the processes and practices within the internal audit function. As such it is an ideal opportunity to benefit from a formalised and credible peer review, carried out by the standard setter.
You will receive regular feedback during the process. On completion, you will be able to:
The process will deliver value to your organisation's stakeholders as well as helping to establish a culture of continuous improvement and engage, motivate and develop the audit team.
To receive a proposal for EQA services, please contact us or call us on 020 7498 0101 contact us via this form