1. Use of External Consultants
Session 7

2. Need for External Consultants
More cost-effective to employ consultants than to develop in-house the necessary skills to
Conduct audit of complex systems
market test the entire IT audit service;
support and develop IT audit strategy and approach;

3. Need for External Consultants (contd.)
Add breadth and penetration to examinations;
Identify new approaches and introduce different perspectives;
Survey best practice in relevant outside fields and activities;
Provide a cross-check on the auditor’s own approach, method and costs;
Provide extra resources to meet peak workloads;and
to add weight to findings, conclusions and recommendations

4. Type of Consultants
Three broad categories:
a consultancy firm or similar organisation;
an individual or group with an academic or research involvement in the subject or area under examination, or skilled in relevant disciplines or analytical techniques; and
someone with in-depth experience and an expert practical background in relevant operations or business activities.

5. Notifying the Auditee
Auditee should be notified about use of consultants to give them an opportunity to:
put forward any general reservations or suggestions;
confirm their acceptance;
raise any questions about the access the consultants will need to auditee records;
discuss potential difficulties over individual consultants or consultancy firms, and
seek information on how the results of the consultants’ work will be handled

6. Selection Process
Shortlist firms
Seek bids
Assess proposals

7. Selection Process (contd.)
Shortlist from
consultants who have previously carried out successful assignments;
professional bodies and similar organisations;
standard reference sources, for example directories; and
suggestions by the audited body

8. Selection Process (contd.)
Ensure sound financial control:
draw up specification of the objectives, scope and timing of assignment;
prepare a provisional estimate of fees and expenses
confirm availability of funds and provisional budget approval;
monitor costs against budget as work proceeds; and
revise work plans to keep within approved budget

9. Selection Process (contd.)
Seek bids
Draw up requirements clearly
Competitive bidding
Follow tendering procedures
Assess proposals
Based on pre-decided criteria

10. Working Relationships
Brief consultants on the objectives of the work
Provide required information and co-operation
Watch for any risk of confrontation between specialist consultants and the auditee’s own experts.
Make it clear that the consultants’ role as part of the team means that they will operate under the overall management of the team leader

11. Managing Work
make sure there is a clear understanding about the scope of the consultants’ work, timetable and deadlines;
encourage two-way traffic and an effective working relationship between the consultants and the rest of the team;
ensure that any variations to the work, and extra costs, are cleared and approved in advance and the contract amended accordingly; and
review and discuss the consultants’ reports promptly

12. Findings of Consultants
Consultants’ findings may be used in the following ways:
Discuss and incorporate in final report;
Wholly subsume their findings in the final report;
Findings included as a separate chapter or annex in the final report; or
report is published separately by the audit body, as complimentary to the main report.

13. Assessing Performance of Consultants
Main aspects to be covered in assessment:
Whether the work met the agreed task objectives and timelines and within approved cost?
Whether there was good co-operation and co-ordination with the rest of the audit team?
Whether the consultants provided other “added value” to the examination?
What ideas and suggestions do the consultants have for improving future arrangements?
Whether there are any other lessons for the future