Self-Assessment Test on Compliance with ICAI Standards on Internal Audit

From Assessment to Action: Driving Continuous Improvement

The self-assessment is not an endpoint but a crucial starting point for a journey of continuous improvement. The value derived from this exercise lies in the actionable steps taken to address identified gaps and strengthen the internal audit function.

Developing Targeted Remediation Plans

For every question scored below a ‘4’ or ‘5’, a specific remediation plan should be developed. This plan should outline:

• Specific Actions: What concrete steps will be taken to address the deficiency (e.g., drafting a new policy, implementing a new review checklist, conducting specific training)?
• Responsible Parties: Who is accountable for implementing each action?
• Timelines: When will each action be completed?
• Required Resources: What resources (e.g., budget, personnel, technology) are needed?
• Success Metrics: How will the effectiveness of the implemented changes be measured?

For areas scoring in the ‘Needs Improvement’ or ‘Poor’ categories, the remediation plans should be comprehensive and prioritized based on the criticality of the associated SIA and its impact on audit quality and risk. For instance, deficiencies related to independence, evidence, or documentation should be addressed with immediate urgency due to their fundamental impact on audit credibility and defensibility.

Integrating Self-Assessment into Your Quality Assurance Program

This self-assessment should become a regular, integral part of the firm’s overall Quality Assurance (QA) program, as mandated by SIA 7. Regular self-assessments (e.g., annually or semi-annually) enable the firm to monitor progress, identify new challenges, and ensure sustained compliance. The results of these self-assessments should feed directly into the firm’s strategic planning and professional development initiatives. By embedding this practice, the firm reinforces its commitment to excellence and ensures that quality is not a one-time check but an ongoing process. This institutionalization of quality reduces reliance on individual expertise and ensures consistent, high-quality deliverables across all engagements and personnel.

The Value of External Peer Review

While self-assessment provides valuable internal perspectives, external validation is equally critical. SIA 7 strongly advocates for external quality reviews at least once every three years. An independent external peer review offers an objective assessment of the firm’s adherence to professional standards, providing fresh perspectives and identifying blind spots that internal reviews might miss. The findings from external reviews, coupled with a transparent action plan for addressing them, significantly enhance the firm’s credibility with clients and regulators. This independent validation of the firm’s quality can serve as a powerful marketing tool, demonstrating a profound commitment to professional excellence and continuous improvement.