Service Level Agreement for Internal Audit: Why You Need It
As businesses grow and become more complex, so do their internal processes and operations. This complexity often requires the need for an internal audit function. However, conducting an internal audit is not a simple task. It requires careful planning, execution, and monitoring to ensure that the audit produces accurate results that can be relied upon. One crucial component of ensuring a successful internal audit is the implementation of a service level agreement (SLA). In this article, we will discuss why you need an SLA for internal audit and what you should include in it.
What is a Service Level Agreement for Internal Audit?
A service level agreement (SLA) is a contract between the internal audit function and its stakeholders. The SLA outlines the services that will be provided by the internal audit function, the expectations of stakeholders, and the performance metrics that will be used to measure the success of the internal audit function.
Why You Need an SLA for Internal Audit?
1. Clearly Define Roles and Responsibilities
An internal audit SLA clearly defines the roles and responsibilities of the internal audit function and its stakeholders. This includes defining the objectives of the audit, the scope of work, timelines, and who will be responsible for what. This clarity helps to ensure that everyone involved in the audit understands their roles and responsibilities, reducing the risk of misunderstandings and miscommunications.
2. Establishes Clear Expectations
An SLA helps to establish clear expectations for stakeholders, including management and the board of directors. This clarity ensures that stakeholders understand what they can expect from the internal audit function in terms of the scope of work, timelines, and deliverables. It also establishes the performance metrics that will be used to evaluate the success of the internal audit function.
3. Improves Communication
An internal audit SLA can promote better communication between the internal audit function and its stakeholders. It ensures that all parties understand the objectives, scope, and timeline of the audit. This clarity can help to reduce the risk of misunderstandings and miscommunications, which can lead to delays or inaccurate results.
What Should Be Included in an Internal Audit SLA?
1. The Scope of Work
The SLA should clearly define the scope of work for the internal audit function. This includes what areas will be audited, what processes will be reviewed, and what deliverables will be produced.
The SLA should establish the timelines for the internal audit function. This includes the start and end dates of the audit, as well as interim milestones and deadlines.
3. Performance Metrics
Performance metrics should be included in the SLA. These metrics should be used to evaluate the success of the internal audit function. Metrics may include the number of audit findings, the percentage of findings closed, and the number of recommendations accepted.
4. Roles and Responsibilities
The SLA should clearly define the roles and responsibilities of the internal audit function and its stakeholders. This includes defining the objectives of the audit, the scope of work, timelines, and who will be responsible for what.
An SLA for internal audit is an essential component of a successful internal audit function. It helps to establish clear expectations, promote better communication, and ensure that all parties understand their roles and responsibilities. The SLA should include the scope of work, timelines, performance metrics, and roles and responsibilities. By implementing an SLA, businesses can be confident that their internal audit function will produce accurate and reliable results.