Internal Audit Handbook（2007）D8-Integrated Cost Management (Cost of Internal Audits).pdfVIP

Special Topics and Supplementary Discussion D | 8 Integrated Cost Management (Cost of Internal Audits) 8 Integrated Cost Management (Cost of Internal Audits) Key Po I nts ••• • To allow Internal Audit to perform its tasks effectively, the organization must provide adequate resources to guarantee that the department’s capacity is fully utilized and it produces the best possible results. • A tracking system can be used to allocate costs to Internal Audits activities and thus measure resource utilization. • A time management system is an important tool for allocating the cost of time and effort spent to audit activities. By recording time Internal Audit manage- ment can also analyze how employees use their time. • Internal Audit’s total costs may include time and effort, direct audit-related costs, direct non-audit-related costs, and indirect costs. • An effective cost monitoring process also supports Internal Audit’s billing pro- cess. • There are several different cost transfer models that can be used. Selection of the appropriate model depends on the administrative burden created by the billing process and the nature of the audit activities conducted in the company. • Internal Audit’s performance should be assessed from both a financial and non- financial perspective. When it comes to cost management, Internal Audit is no different from other cor- Cost ManagementCost Management porate departments. To allow Internal Audit to perform its tasks effectively, the company must ensure it has appropriate resources available to ensure that the de- partment’s capacity is fully utilized and it produces the best possible results. It is also important to ensure that the