Measuring Performance of Internal Audit

Who supervise supervisors?
It's a question that probably spinning dilemma is not easily end. As a 'watchdog' in an organization, internal audit does not escape from the question. Who is auditing the activities of internal audit you?
Self-assessment review?
Alternatively, there is an independent party hired to evaluate the performance of your internal audit activity?
Or, instead of your internal audit activity 'untouchable', to avoid the question above?
As per the standard 1300 family, internal audit activity should implement quality assurance and improvement program (QAIP - Quality Assurance and Improvement Program). In general, the program is done to ensure some basic things, namely:

   1. Suitability of the internal audit activity with the code of ethics, definitions, and internal auditing standards generally accepted
   2. Efficiency and effectiveness of internal audit activity
   3. Identify opportunities for improvement and enhancement
In the standard QAIP is also regulated how and who will conduct an assessment of the internal audit activity. The program is conducted through internal review and external review. Internal review is conducted continuously as an integrated part of the process management of internal audit activity. Besides the internal review is also conducted periodically, either by personnel within their own internal audit activity or other personnel within the organization that controls professional practice of internal audit framework. While the external review conducted at least once every five years by independent parties outside the organization with the competence and procedures are governed by a framework of professional practice of internal auditing.
The next question is, how to measure these things. Measuring compliance with the code of ethics, definitions, and standards of internal auditing is relatively more easily done by comparing the activity of internal audit against the code of ethics, definitions, and internal auditing standards issued by The Institute of Internal Auditors. As for measuring the efficiency and operational effectiveness is required prior determination of internal audit performance measurement framework.
To set effective performance measures, Chief Audit Executive should first identify those aspects in the performance of critical internal audits. One way that is often used in them are adapted from the mind frame of Kaplan and Norton, Balanced Scorecard, which suggest aspects of internal audit performance measurement into perspective:

   1. Innovation and learning, to answer the question whether the internal audit and capable of creating sustainable value.
   2. Internal Audit process, to answer questions on what areas of internal audit skills.
   3. Management / auditees, adaptation customer perspective, namely to answer the question of how customers view the internal audit.
   4. Board / Audit Committee, the adaptation of financial perspectives, to answer the question how the internal audit looked at stakeholders.
The four perspectives are interrelated in a causal relationship from the bottom up. Innovation and learning is a continuous process within the internal audit activity that allows the internal audit activity can run the internal audit process by getting better from day to day. With the internal audit process, the better, expected satisfaction management / auditee will also increase. And in the end of top management as the main carrier of the organization's mission will also feel the satisfaction of the increasing activity of internal audit services.
By using a framework like this, when the flow is reversed from the top down, will also appear red outline how the organization's vision and mission must be translated into operational strategies by management. Furthermore, the organization's strategy must be supported by a strategy of internal audit activity. To support the strategy of internal audit activities in support of achieving the mission of the organization, then the internal processes within the internal audit activity should always be improved by empowering resources with continuous learning and always looking for new innovations. Thus it would seem alignment between the company's mission to the resources of internal audit activity
As shown in the example above, not all indicators can be easily made in quantitative measurements. Number of hours of training, the percentage of realization of the assignment, the number of repeat findings, the percentage of recommendations that diiplementasikan, and such an indicator which is easily measured. But the indicator that shows the level of perception that are qualitatively like the satisfaction of management / auditee and the Audit Committee, require further engineering to be measured and compared from time to time. Techniques are often used for example with the scale and ordinal or nonparametric statistics.
Of course, no one measure that would apply equally to every organization. Internal audit activities in one organization may differ from other organizational structures, processes, size, number of staff, tools and techniques used, cultural organizations, and others. These differences can cause one indicator can be applied in a single organization but can not apply in another organization. Yet, however varied the internal audit activity and the techniques used, performance measurement everywhere one on the goal of improved quality. Improving the quality indicated by the operational suitability of the internal audit activity to the professional practice framework, run effectively and efficiently, and always leads to the improvement and enhancement in supporting the achievement of the organization's mission.
What about the measurements in your own organization?