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Internal Audit Quality: Developing a Quality Assurance and Improvement Program, First Edition.
Sally-Anne Pitt.
 2014 by John Wiley & Sons, Inc. Published 2014 by John Wiley & Sons, Inc.

APPENDIX C
List of Key Performance Indicators

Quality Indicators
Quality Assurance and Improvement Program
■ Quality assurance and improvement program implemented

Internal Assessment
■ Periodic assessments and/or health checks performed on a biannual basis
■ All policies and procedures covered through health checks
■ Conformance with policies and procedures
■ Professional standards covered through health checks
■ Conformance with professional standards
■ Numbers of improvements embedded (include target)
■ Proportion of engagement working papers reviewed through health checks
(include target)
■ Level of management satisfaction (include target)
■ Level of audit committee satisfaction (include target)

External Assessment
■ External assessment undertaken at least once every five years

Strategy and Planning Indicators

■ Annual review of the internal audit strategy
■ Endorsement of the strategy by the audit committee
■ Endorsement of the internal audit values by the audit committee
■ Level of management satisfaction with strategy (include target)
■ Level of audit committee satisfaction with strategy (include target)
■ Internal audit risk assessments conducted annually
■ Capability and resource planning undertaken annually
■ Business continuity planning undertaken annually

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346 Appendix C

Areas of Responsibility Indicators

■ Total number of engagements completed by the internal audit function (include
target)
■ Time spent on functional engagements, program-based engagements, and inte-
grated auditing (include target)
■ Number of assurance engagements completed by the internal audit function
(include target)
■ Number of assurance engagements performed by the internal audit function as a
proportion of overall plan (include target)
■ Number of compliance audits, operational/performance audits, IT audits, man-
agement initiated reviews, and consulting engagements completed (include
target)
■ Number of compliance audits, operational/performance audits, IT audits, man-
agement initiated reviews, and consulting engagements as a proportion of overall
plan (include target)
■ Time spent on compliance audits, operational/performance audits, IT audits, and
consulting engagements as a proportion of overall plan (include target)
■ Time spent on fraud investigations as a proportion of the overall plan (include
target)
■ Time spent on management-initiated reviews as a proportion of the overall plan
(include target)
■ Time spent on follow-up audits (include target)
■ Time spent on audit support activities (include target)
■ Relative proportion of time spent on consulting versus assurance engagements
(include target)
■ Relative proportions of time spent on governance, risk management, and control
assurance (include target)
■ Number of engagements incorporating governance, risk management, and control
elements (include target)
■ Number of engagements focused exclusively on governance, risk management, or
control assurance (include target)

Internal Audit Charter Indicators

■ The number of times the chief audit executive meets privately with the chief
executive officer and other senior management (include target)
■ The number of times the chief audit executive meets privately with the audit
committee (include target)
■ The number of strategic committees that internal auditors are involved in (include
target)
■ Annual review of the internal audit charter
■ Compliance with internal audit charter
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Appendix C 347

Resourcing Indicators
Budget
■ Delivery of operations in accordance with approved budget
■ Resources allocated to the internal audit function relative to international
benchmarks
■ Levels of expenditure (budget versus actual, costs per auditor day, ratio of payroll
to other costs, comparison between audit sections, comparison with previous
periods)
■ Cost of audit as a proportion of total corporate operating costs (include target)
■ Comparison of audit budget to actual costs
■ Ratio of audit payroll costs to other audit costs (include target)
■ Ratio of productive to unproductive audit time (include target)
■ Costs per implemented audit recommendation (include target)
■ Ratio of outputs (products, programs, or services) to inputs (resources utilized)
meets or exceeds established standards, targets, or benchmarks

Staffing
■ Capability plan reviewed on an annual basis
■ Number of auditors per 1,000 staff average compared to sector average (include
target)
■ Number of auditors as a percentage of total corporate staff (include target)
■ Average years of staff experience (include target)
■ Number of years of audit experience (include target)
■ Number of years in area of current audit (include target)
■ Proportion of internal auditors with degree and postgraduate qualifications
(include target)
■ Number of professional certifications/percentage of staff certified (include target)
■ Absenteeism rates (include target)
■ Level of internal audit staff turnover (include target)
■ Number of new hires versus total number of staff on audit team (include target)
■ Levels of internal audit staff satisfaction (include target)
■ Levels of internal audit staff grievances (include target)
■ Existence and annual update of a flexible work policy
■ Flexible work practices offered to all staff
■ Proportion of staff utilizing flexible work practices (include target)
■ Candidate satisfaction with recruitment and/or induction processes (include
target)
■ Time taken to successfully recruit to vacant position (include target)
■ Cost of recruitment/cost per hire (include target)
■ Completion of induction by all new recruits
■ Number of times guest auditors utilized on engagements (include target)
■ Number of internal audit staff seconded to other parts of the organization (include
target)
■ Number of staff rotated into internal audit (include target)
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Outsourcing
■ Relative proportions of the internal audit plan insourced and outsourced (include
target)
■ Turnover of staff within the service provider allocated to engagements for the
organization (include target)
■ Years of relevant experience among service provider staff allocated to engage-
ments for the organization (include target)
■ Time allocated by external providers to share learning with in-house staff (include
target)
■ Number of better practices recommended by the service provider (include target)
■ Number of systemic issues identified by the service provider (include target)
■ Proportion of time spent by the service provider in meeting with management
(include target)

Professional Development Indicators

■ Proportion of internal audit staff performance evaluations completed on an annual
basis (include target)
■ Development and review of a capability plan on an annual basis
■ Proportion of budget allocated to professional development (include target)
■ Regularity of staff meetings (include target)
■ Proportion of individual training/development plans implemented (include target)
■ Average training hours per internal auditor (include target)
■ Attendance at professional meetings
■ Number of internal audit staff involved as volunteers in professional associations
(include target)
■ Number of internal audit staff involved in mentoring activities (include target)

Policy and Procedures Indicators

■ Existence of policies and procedures
■ Annual review of policies and procedures
■ Extent to which policies and procedures are being applied by internal audit staff

Annual Planning Indicators

■ Proportion of senior managers consulted as part of the planning process (include
target)
■ Level of senior management satisfaction with the audit plan (include target)
■ Proportion of the organization’s strategic priorities addressed in the audit plan
(include target)
■ Conduct of a periodic, at least annual, comprehensive risk assessment
■ Percentage of key risks audited per annum (include target)
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■ Proportion of audit universe addressed in the audit plan (include target)

■ Extent of coverage of strategic priorities (include target)
■ Extent of coverage of key business activities (include target)
■ Proportion of geographic and functional areas addressed in the audit plan (include
target)
■ Percentage of major projects audited per annum (include target)
■ Percentage of major systems audited per annum (include target)
■ Percentage of systems under development audited per annum (include target)
■ Existence of audit committee concerns regarding unaddressed risks
■ Completion of audit plan
■ Numbers of management initiated requests (include target)

Engagement Planning Indicators

■ Engagement client consulted prior to the engagement commencing
■ Risk assessments conducted of the auditable areas as part of engagement planning
■ Analytical procedures and CAATs are used in a minimum number of engagements
(include target)
■ Engagement risk assessments conducted for 100 percent of operational/perform-
ance audits
■ Total hours used in planning versus scheduled hours used (include target)
■ Total hours planning versus total engagement hours (include target)

Engagement Performance Indicators

■ The cause and effect of all findings and observations documented within working
papers
■ Closing interviews held for all audit engagements
■ The chief audit executive attending all closing interviews
■ Working papers completed and appropriately reviewed for all engagements
■ Timeliness of fieldwork
■ Percentage audit plan completed (include target)
■ Number of audits completed (include target)
■ Proportion of audits completed within prescribed time frames (include target)
■ Proportion of audits completed within prescribed budget (include target)
■ Proportion of billable/recoverable hours versus nonbillable/nonrecoverable hours
(include target)
■ Level of engagement client satisfaction (include target)
■ Actual time spent versus budget (include target)

Communication Indicators
■ The number of times the chief audit executive meets privately with the chief
executive officer and other senior management (include target)
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■ The number of times the chief audit executive meets privately with the audit
committee (include target)
■ The completion and update of a stakeholder engagement map on an annual basis.
■ Elapsed time for issue of reports—completion of engagement fieldwork to issue of
draft report (include target)
■ Elapsed time for finalization of report—issue of draft report to issue of final report
(include target)
■ Percentage of recommendations accepted (include target)
■ Perceived importance of audit findings and recommendations
■ Percent of audit recommendations implemented (include target)

Knowledge Management Indicators

■ Knowledge management strategies implemented (include target)
■ Professional networking events attended by staff (include target)
■ Systemic audit issues identified and shared with organization (include target)
■ Communities of practice established and meetings held (include target)

Marketing Indicators
■ The level of awareness of internal audit across the organization (include target)
■ The proportion of internal audit time devoted to marketing activities (include
target)
■ The number of general information sessions provided by the internal audit
function to the organization (include target)
■ The development and maintenance of an internal audit website
■ The amount of marketing collateral produced by the internal audit function
(include target)