Corporate Strategy Audit – where is the methodology?
While attending Internal Audit conferences, many presenters, including Chief Audit Executives, raised their board’s concerns about corporate strategy audit. However, it was striking that currently no systematic and structured audit methodology has been developed to address this issue.
This audit should focus on evaluating the corporate strategy framework and not to give an opinion on the strategy itself. This is a key distinction to make when the internal auditor defines and states the scope of the strategy audit.
The primary challenge for internal audit to review and assess the corporate strategy is three fold:
- Due its unusual nature and scope, senior management and the auditees might have certain unease or even outright resistance to this engagement. Since corporate strategy has never been audited before internal audit itself is in an uncharted territory.
- Within the corporate strategy framework, it is indispensable to consider the interdependencies between corporate strategy and:
- enterprise risk management
- human resources strategy
- regulatory compliance
which poses additional complexity to define stakeholders and the auditees.
- Internal audit professionals do not possess a structured knowledge and reference base to evaluate the corporate strategy framework.
Scope and program development
In order to develop a comprehensive scope and detailed audit methodology/program, the auditor should acquire in-depth knowledge of various strategy frameworks. They also have to familiarise
themselves with their development and implementation, best practices.
Currently, the Institute of Management Accounts (IMA), USA offers a comprehensive certification called: Certified in Strategy and Competitive Analysis, CSCA. This knowledge and skillset would
enable the assigned internal auditor to assess the organisation’s corporate strategy framework.
How would you approach auditing corporate strategy?
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