Testing Internal Audit Quality

Over the past decade, considerable importance has been attached to efficiency activities of the internal audit department at organizations.  This is reflected in a series of regulatory circulars necessitating a periodic process to assess audit quality, including: the Government Companies Authority, Supervisor of Banks, the Capital Market, Supervision and Savings Division at the Finance Ministry, and the Health Ministry with respect to sick funds.

In addition, a professional standard from the international IIA prescribes that each internal audit department conduct, once every 5 years, a quality assessment review (QAR) to assure audit quality.  The review is to be conducted by an authorized and autonomous party, external to the organization, alongside an internal assessment by the chief internal auditor.

The QAR, conducted by a team of experts from Risk Advisory Services (RAS) at BDO Consulting Group, is a significant process comprising a methodical, professional and independent review of the organization's internal audit system, as a consequence of which decisions are made in order to enhance audit quality.

The QAR's key targets are to test the degree to which the internal audit's objectives are attained, assess to what extent they are effective and useful, analyze expectation gaps regarding their purpose (reasons and causes) and offer recommendations for improving the internal audit's function relating thereto (Board of Directors, Audit Committee, Management, etc.).


The internal audit's QAR services are provided in a number of configurations:

  • Testing QAR in the organization according to regulatory requirements by the Board of Directors
  • Testing the quality of the internal audit function by the chief internal auditor who wishes to implement the IIA Standards on quality assurance
  • Internal QAR – assistance to the organization and chief internal auditor in getting ready for the quality testing to be implemented by an external party and support to the internal audit department in developing a correct work format.