Your strategy defines success. Your risks threaten its delivery. Your internal audit plan should connect the two.
An organisation can have an approved strategy, an enterprise risk register and an internal audit plan, yet still lack meaningful assurance over its most important objectives. Effective internal audit planning requires more than identifying routine audit activities; it requires an understanding of the organisation’s strategic direction and the risks that could prevent its objectives from being achieved.
Masegare & Associates Incorporated (MAI) helps boards, Audit and Risk Committees and executive management align strategic priorities, material risks and independent assurance to strengthen oversight, governance and organisational performance.
The Executive Challenge: Is Internal Audit Focusing on the Right Risks?
Audit coverage should not merely repeat last year’s assignments. It should respond to the risks that could prevent delivery of the organisation’s strategy. An effective internal audit plan should therefore reflect the organisation’s changing risk environment, emerging challenges and most significant strategic priorities.
Boards, Audit and Risk Committees and executive management should consider the following questions when evaluating the effectiveness of their internal audit plans:
- Can the board see which strategic objectives the internal audit plan supports?
- Are emerging risks, critical initiatives and assurance gaps reflected in audit priorities?
- Are scarce audit resources allocated to the most significant exposures?
- Is the Audit and Risk Committee receiving a clear, defensible explanation of audit coverage?
The critical question is not simply whether an internal audit plan exists, but whether it provides assurance where the organisation needs it most.
From Strategic Ambition to Meaningful Assurance
Drawing on strategic management principles, including Kaplan and Norton’s Balanced Scorecard and strategy maps, MAI connects strategic intent to risk-based audit planning. This approach recognises that internal audit should be directly linked to the objectives that an organisation seeks to achieve and the risks that could undermine those objectives.
Strategically aligned internal audit planning involves understanding the organisation’s strategic objectives, identifying material risks, evaluating management responses, determining assurance gaps and establishing audit priorities that address the most significant areas of exposure.
Every proposed audit should explain the strategic objective it supports, the risk it addresses and the assurance it is intended to provide. This strengthens transparency and supports informed decision-making by management and governance structures.
How MAI Supports Your Organisation
Masegare & Associates Incorporated offers integrated internal audit, governance, risk management and assurance advisory services designed to help organisations strengthen the relationship between strategic priorities and independent assurance.
1. Strategic Audit Plan Development
MAI assists organisations in developing annual and rolling risk-based internal audit plans grounded in organisational strategy, risk exposure and available resources. These plans are designed to direct internal audit attention towards areas that could significantly affect the achievement of strategic and operational objectives.
2. Independent Alignment Reviews
We evaluate whether existing internal audit plans adequately address material strategic, operational, financial, technology and compliance risks. These reviews help identify areas where audit coverage may need to be strengthened or redirected.
3. Strategy-to-Risk Mapping
MAI supports organisations in linking strategic objectives to key risk exposures, management responses and assurance requirements. This process helps establish a clear connection between organisational priorities and the internal audit activities intended to provide assurance over them.
4. Audit Universe and Prioritisation
We assist organisations in refining their audit universe, assessing risks and establishing a transparent rationale for selecting and prioritising internal audit engagements. This helps ensure that available audit resources are directed towards the areas of greatest significance.
5. Combined Assurance
MAI supports the identification of assurance coverage gaps, duplication and opportunities for coordination among assurance providers. A coordinated assurance approach strengthens oversight and helps organisations make better use of available assurance resources.
6. Governance and Performance Reviews
Our governance and performance reviews examine strategic planning, risk oversight and performance monitoring arrangements. These reviews support organisations in assessing whether governance structures and management processes effectively contribute to the achievement of strategic objectives.
Our Structured Five-Phase Approach
MAI applies a structured five-phase approach to strategic internal audit planning. The methodology is designed to ensure that audit priorities are informed by organisational strategy, material risk exposures and the assurance needs of key stakeholders.
Phase 1: Understand Strategy
The first phase involves reviewing the organisation’s mandate, strategic objectives, key initiatives and stakeholder expectations. This establishes an understanding of what the organisation aims to achieve and the priorities that should inform internal audit planning.
Phase 2: Assess Material Risks
The second phase focuses on identifying and assessing material risks, risk appetite, management actions and emerging exposures that could affect the achievement of organisational objectives.
Phase 3: Map Assurance Coverage
The third phase involves reviewing existing internal audit work, considering assurance provided by other functions and identifying material assurance gaps that may require additional attention.
Phase 4: Prioritise Audits
Based on the identified risks and assurance requirements, MAI supports the prioritisation of audit engagements, including their timing, required skills and resource allocation. Audit priorities are established on a documented risk basis.
Phase 5: Support Governance Decisions
The final phase involves presenting the proposed internal audit plan, its rationale, identified assurance gaps and relevant limitations to the appropriate governance structures for consideration and approval.
Why Masegare & Associates Incorporated?
Established in 2007, Masegare & Associates Incorporated provides integrated governance, risk management, internal audit and assurance advisory services to organisations across the public and private sectors.
Our approach combines strategic perspective, independent professional judgement and practical deliverables to help organisations strengthen oversight, improve risk management and enhance the effectiveness of independent assurance.
By aligning internal audit activities with organisational strategy and material risks, MAI supports boards, Audit and Risk Committees and executive management in making informed decisions about audit coverage and assurance priorities.
Let’s Discuss Your Audit Plan Alignment
Is your organisation developing a new risk-based internal audit plan, reassessing an existing plan or seeking to strengthen combined assurance? MAI can assist you in evaluating your strategic priorities and identifying an appropriate scope for a focused internal audit planning review.
Contact Masegare & Associates Incorporated to discuss how strategically aligned internal audit planning can support stronger governance, effective risk management and meaningful assurance.
Email: admin@masegare.co.za
Website: www.masegare.co.za
When contacting MAI, please include your organisation’s name, contact details and whether you require an audit plan review, development of a new internal audit plan or combined assurance advisory services.
Professional References
Kaplan, R.S. & Norton, D.P. (1996). Linking the Balanced Scorecard to Strategy. California Management Review, 39(1), 53-79.
Kaplan, R.S. & Norton, D.P. (2000). Having Trouble with Your Strategy? Then Map It. Harvard Business Review, September-October.