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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › How to understand disadvantage of outsourcing internal audit
How to understand this sentence the cost may be high enough to force entity to choose not to have an internal audit department at all?
the cost may be high means have an internal audit dept may cost a lot.
Then they should be an advantage of outsourcing internal audit dept, not disdavantage.
I feel confused.
?
Can you give an example?
Thanks.
Consider a company that is thinking about having an IA department, but does not fwwl able to set one up internally (eg lack of skills, lack of management interest). It could then think about outsourcing IA. However, you would expect outsourcing rather expensive because the outsource company will want to make a profit on the people it puts on the job ie, it will charge out the auditors at a substantial hourly rate. This could make internal audit so expensive that the company decides to abandon the whole idea.