Co-sourcing internal audit function in Malta : a study

Abstract

PURPOSE: The objectives of this study were to determine whether the Internal Audit Function is moving beyond its fundamental roles, and establish how the co-sourcing arrangement works, or can potentially work, together with the main motives behind it. The study further evaluated the process adopted behind this arrangement, and how this form of partnership could benefit Maltese entities. DESIGN: The objectives of this study were achieved through thirteen semi-structured interviews. Participants in this study were professionals from the Internal Audit Function with sufficient knowledge about the subject matter. FINDINGS: Findings indicate that the main role of an Internal Audit Function is to provide assurance; however, it is starting to be involved in other roles. The most common arrangement adopted is that of retaining in-house Internal Audit Function mainly because many believe that in-house staff members are by far better than external people to add value due to their knowledge of the business. CONCLUSION: Today we can see how the IAF is moving beyond its fundamental roles mainly assurance, towards other roles. which calls for numerous resources to be present. Co-sourcing arrangement is appraised by many Maltese entities. Nonetheless, not many entities adopt this arrangement within their organization. Many see it as a viable alternative when resources are lacking in-house; however, they are not willing to adopt it when there are sufficient resources. A phased approach is in place when an entity decides to change the sourcing arrangement, and overall, benefits associated with this arrangement outweigh the costs involved. VALUE: It is expected that this study shall give a clear insight into benefits associated with co-sourcing. Recommendations include more awareness of this arrangement in the sense that it should not be seen as an alternative due to lack of resources, but in terms of longterm benefits.