Balanced Scorecard

The Balanced Scorecard: Applications in Internal Auditing

Mark L. Frigo, PhD, CPA, CMA

Examples of Performance Measures in Internal Audit Scorecards

 Page 6 Measuring Performance – Add Value (paragraph)

Gone are the days of internal audit as a forgotten sleepy place. The reality of today’s business environment is that internal audit, like others in the organization, is responsible for contributing to the success and performance of the enterprise and will be held accountable for results.

What gets measured gets done. Appropriately developed performance measures help to drive results, performance, quality and continuous improvement. Strong internal audit functions have processes for measuring their own performance with a balanced scorecard of measurements focusing on cost, quality and timeliness.

To be effective, performance measures should be aligned directly to stakeholder value drivers. These will vary among organizations but could include measures such as audit plan accomplishment, cycle time, recommendations accepted, control breakdowns or deficiencies in areas recently reviewed by internal audit and customer satisfaction.

Example performance measures for internal audit could include:

Quality

• Customer/process-owner satisfaction scores from auditees

• Audit committee and management evaluation scores

• External audit evaluation score from company’s external auditor

• Upward feedback scores on chief audit executive and internal audit managers from internal audit staff

• Percentage of internal audit staff with CIA or other relevant certifications

• Performance evaluation scores on internal audit staff

• Control breakdown/deficiencies in areas recently reviewed by internal audit

• Internal control scorecard results by major area within the company

• Results of internal and independent quality assurance reviews

Cost

• Percentage of fully loaded internal audit cost as a percentage of...