Outsourcing internal audit services : an empirical study on Queensland public-sector entities
Subramaniam, Nava, Ng, Chew and Carey, Peter 2004, Outsourcing internal audit services : an empirical study on Queensland public-sector entities, Australian accounting review, vol. 14, no. 3, pp. 86-95.
A study of Queensland public-sector entities suggests outsourcing of internal audit services to be extensive (88%), with 51% of respondent agencies adopting co-sourcing and 37% of the agencies fully outsourcing. Results suggest that internal audit outsourcing is largely adopted for non-financial reasons such as lack of technological know-how and service quality rather than financial reasons. Deficiencies of current governance arrangements concerning internal audit outsourcing include (1) a lack of audit committee involvement in outsourcing processes, particularly in co-sourcing entities, and (2) inadequate segregation of duties whereby the same senior management is involved in key arrangements including selection, approval, negotiation and evaluation of contractual performance.