How does the internal audit activity go about prioritizing its resources?
Effective prioritization involves staying in sync with the organization s risk priorities and taking a risk-based approach to internal audit planning. By continuously monitoring organizational changes that might alter the plan, the CAE should be well equipped and positioned to make informed and educated recommendations to management and the board on the most effective use of internal audit resources. Given the potential size of the audit universe, the related scope of work, and the need for efficient use of limited internal audit resources, it is critical to prioritize and plan audit engagements, based on an annual risk assessment that is viewed from the perspective of organizational goals and objectives.Most models used by CAEs for prioritization of their audit work, take into consideration such factors as financial impact, asset liquidity, management competence, quality of internal controls, degree of change or stability, time of last audit engagement, complexity, and strategic risks
