#1/2011 - Internrevisorerna - Hem

BLENDED
ENGAGEMENTS
Combining assurance and consulting services in a single audit
can yield significant efficiencies for practitioners.
Michael J. Head, CIA, CPA, CMA, CISA
Managing Director of Corporate Audit, TD Ameritrade
Kurt F. Reding, PHD, CIA, CPA, CMA
Assistant Professor and Grant Thornton Faculty Fellow
School of Accountancy, Wichita State University
Cris Riddle, CIA, Audit Analyst II, TD Ameritrade
IN TODAY’S ECONOMIC ENVIRONMENT, everyone, including
internal auditors, is under pressure to do more with less. But
in most cases only so much belt tightening can be done before
vital organs are damaged. When costs cannot be cut any
further, successful audit departments find innovative ways to
stretch their resources.
Blending assurance and consulting services into a single
engagement is evolving as a way for internal auditors to realize
efficiencies that may not exist when these services are performed
separately. In fact, some internal audit functions may
be conducting »blended engagements» without even realizing
it. Although formal, authoritative guidance does not yet
exist for performing such engagements, internal auditors can
follow a principles-based model that offers professional guidance
for those wishing to implement this approach without
violating existing standards of practice.
ASSURANCE AND CONSULTING SERVICES
A first step toward formulating guidance for conducting
blended engagements is to solidify internal auditors’ understanding
of assurance and consulting services, which by definition
comprise the two types of services audit practitio-
This article was reprinted with permission from the October
2010 issue of Internal Auditor, published by The Institute
of Internal Auditors, Inc., www.theiia.org.
ners perform. The authors define these services as follows:
• Assurance services. An objective examination of evidence
for the purpose of providing an independent assessment
of governance, risk management, and control processes.
• Consulting services. Objective advisory, facilitative, and
training activities — the nature and scope of which are agreed
to with the customer — intended to improve governance,
risk management, and control processes.
Internal auditors should keep in mind that this definition of
consulting deviates somewhat from the definition provided in
The IIA’s International Standards for the Professional Practice
of Internal Auditing (Standards). See »Comparison
to IIA Standards» at right for an analysis of the differences.
As described in the Standards, assurance and consulting
engagements differ in three important respects:
• The primary aim of the engagement.
• Who determines the nature and scope of the engagement.
• The parties that are involved in the engagement.
The primary purpose of an assurance engagement is to provide
an independent assessment based on examination of
evidence. The internal audit function determines the nature
and scope of the engagement, which generally involves three
parties: the party directly responsible for the process,
function, system, or area being assessed (the process owner);
the party providing the assessment (the internal audit
function); and the party or parties who rely on the audit
function’s assessment (the user(s)). Examples of assurance
engagements include assessing the design adequacy and operating
effectiveness of business process controls and evaluating
the operational effectiveness and efficiency of a business
process as reflected in performance metrics.
The primary purpose of a consulting engagement is to
provide independent advice, facilitation, or training services,
commonly at the specific request of the engagement custo-
INTERNREVISION 1/2011 • 9