Developing an Internal Auditing Department Balanced Scorecard

Developing an internal auditing department balanced scorecard

Douglas E. Ziegenfuss Department of Accounting, Old Dominion University, Norfolk, Virginia, USA

The Chief Auditing Executive (CAE) is responsible for establishing and monitoring a quality assurance program to ensure his or Abstract her department meets its mission and This article demonstrates the use complies with the Institute of Internal of the ``Balanced Scorecard'' methodology developed by Kaplan Auditors' (IIA) professional standards. and Norton in selecting Alongside such traditional elements as performance measures for internal supervision, internal reviews, and external auditing departments. It then reviews, monitoring and benchmarking key describes: professional performance measures have come to be standards and guidance concerning the use of performance recognized in recent years as the fourth measures and benchmarking; the element of quality assurance. However, ``Balanced Scorecard'' selecting and monitoring right performance methodology; and a comprehenmeasures can be difficult given the large sive example. Finally, this number of available performance measures. article concludes with specific recommendations concerning the The key issue facing the CAE is to select use of performance measures. performance measures that accurately reflect his or her department's performance and more importantly the department's progress in meeting its mission and objectives. Robert S. Kaplan and David P. Norton have developed one methodology for addressing this issue. Their ``Balanced Scorecard'' methodology ties departmental and individual performance measures into an organization's strategic planning process. CAEs should consider adopting this methodology for their internal auditing departments.

Auditing, Internal Auditing, Audit Quality, Quality Assurance, Performance Measures, Benchmarking

Keywords

Introduction

With assistance from Quality Auditing Services Institute of Internal...