Consulting Engagements: A Key Topic for Belgian Auditors
The IIA Global's 2035 vision highlights the growing importance of consulting missions for internal auditors, mentioning the term "advisory" 48 times. To explore this crucial topic, IIA Belgium recently hosted a fully booked workshop that brought together auditors from both large and small audit shops for the first time.
For those who missed out, here’s a brief overview of the event.
Key Questions Around Consulting Engagements
Two PwC experts, Bram Hostyn and Anna Willaert, led the session with a highly interactive presentation. With little literature available on the topic, they tackled important questions:
- How should consulting engagements be positioned compared to assurance audits?
- What are the key challenges and opportunities of these engagements?
To set the scene, Bram asked: "Who among you conducts consulting audit engagements?" To our surprise, nearly half the room raised their hands. But first, what exactly is a consulting engagement? Examples varied: for some, it meant participating in a working group on AI, while others mentioned pre-assurance engagements or providing insights on an AI roadmap or internal control management. The percentage of time dedicated to these engagements also varied significantly from one service to another.
Key Characteristics of Consulting Engagements
According to the new standards (applicable in January 2025), consulting engagements are defined by what they are not:
- They are not assurance audits.
- They do not involve taking on management responsibilities.
- Independence safeguards must be in place.
However, the standards do not dictate the nature of these engagements, which can vary widely, nor their origin, which could be a request from senior management, operational leadership, or even the internal audit team itself.
Practical Insights and Examples
Consulting missions are diverse and often tailored to the sector's needs. Here are a few practical examples:
- Evaluating new regulations: Assessing their impact on the organization.
- Optimizing reporting processes: Especially in sectors with stringent regulatory demands.
- Risk and project management: Providing strategic advice on managing risks or improving projects.
Key Differences from Assurance Audits
Unlike assurance audits, consulting engagements:
- Have a forward-looking approach.
- Are collaborative and involve all stakeholders in determining the scope and timeline.
- Focus on recommendations and advice, not just findings.
However, independence and objectivity remain essential in both consulting and assurance audits.
Triggers for Consulting Engagements
Consulting missions can be triggered by several factors, such as:
- Organizational changes
- Emerging risks
- New legislation
- Requests for support from management or stakeholders
The type of support needed will depend on the maturity of the organization’s control environment. For less mature services, consulting may involve developing risk management frameworks, while more advanced services may seek strategic advice or process improvements.
The Added Value of Consulting
Consulting engagements offer numerous benefits, including:
- Proactive risk identification
- More efficient processes and controls
- Alignment with the organization’s strategic objectives
- Increased stakeholder confidence
One participant also pointed out that consulting fosters creativity and innovation, as it encourages thinking outside the box.
Breakout Sessions: Small vs. Large Audit Shops
In the second half of the workshop, participants were split into small groups based on the size of their audit shops.
Small Audit Shops (1-5 auditors):
Discussions focused on recognizing a major benefit of consulting engagements: reduced resistance. Participants also noted the importance of clearly defining consulting engagements by including examples in the audit charter and estimating the time spent on such engagements. One challenge highlighted was convincing the audit committee of their value. Another challenge was identified: not become the “helpdesk” of management.
Large Audit Shops (+5 auditors):
We saw that the implementation of consulting engagements varied depending on the service, and a change in CEO can often spark interest. The approach to assurance audits and consulting engagements differs, with consulting results often communicated only to management, nor the audit committee. Ensuring independence was seen as a challenge by all but was met by a participant that the same auditor could not audit the subject matter on which consultancy had been provided.
Conclusion
After a rich exchange of ideas and experiences, participants left the workshop with new insights and connections. A big thank you to our PwC experts and to all who contributed to the event’s success.
Stay tuned for our next workshop—its theme is still a secret, but we promise it will be just as engaging. Don’t forget to register early!
