This year marks the 20^th anniversary of The IIA’s adoption of risk-based audit standards. I chaired The IIA’s Internal Audit Standards Board at the time, and we all recognized what an important milestone the new standards would reflect. Not only were internal audit’s (annual) audit plans to be developed on the basis of enterprise risks (IIA Standard 2010), but individual internal audit engagement plans were to be formulated on the basis of risks in the area, program, or function where the audit was to be undertaken (IIA Standard 2200). Prior to 2002, many internal audit departments undertook cyclical audit plans (e.g., key elements of the organization’s audit universe were to be audited on, perhaps, a three-year cycle).

In the ensuing two decades, the profession has made significant progress in embracing IIA Standard 2010, but from my experience, far fewer routinely undertake a deeper assessment of risks at the outset of an engagement. Instead, they rely on prior engagement programs without seriously evaluating whether/how risks in the area to be audited might have changed. Sadly, this often results in what I call a drive-by audit.

​I use the term “drive-by” to describe those instances in which a canned internal audit program and/or checklist are used to facilitate a routine audit or report. In the financial services and retail industries, branch or store audits are sometimes conducted in this manner.

Don’t get me wrong. Drive-by audits can provide important assurance on internal control effectiveness and compliance matters. They also can serve as fraud deterrents. However, their use does not always conform with The IIA’s International Professional Practices Framework (IPPF), and they rarely provide optimum value to management in the area subject to audit. I have seen the technique used throughout my career, and I often referred to these engagements as “hit-and-runs” in reference to how clients often felt after the audit team came and went.

To avoid being guilty of an ineffective drive-by audit, I offer a litmus test of five key questions to assess your approach:

1. Is the engagement the result of an annual or ongoing risk assessment process? Drive-by audits often are cyclical. “We are going to audit you this year, whether you need it or not.”
2. Is the audit program or engagement plan itself developed based on risk? IIA Standard 2201: Planning Considerations mandates that, in planning an engagement, internal auditors must consider significant risks to the activity, its objectives, resources, and operations. Drive-by audits often are conducted from canned audit programs with little consideration given to the risks in the specific business unit or activity where the audit is being conducted.
3. Is the same audit program being used at each drive-by location? As I indicated, the audit program should be tailored to the risks of the specific unit. However, there is an even greater risk of using canned programs: Management will quickly ascertain the areas subject to audit and ensure they are ready for the audit. Even when new audit programs were used each year, I saw instances of management from the first business unit subject to the annual audit cycle signaling their colleagues subject to subsequent audits on “what the auditors are looking at this year.” While it is good the problems were corrected in advance of the audit, it undermines the ability of the auditors to provide assurance about the ongoing state of operations or control effectiveness.​
4. Does the final audit report offer recommendations, or does it simply provide findings and/or observations? Although rare, some drive-by internal auditors don’t attempt to develop customized recommendations for corrective actions in response to findings or noncompliance cited in the audit report. The final report is nothing more than a list of transgressions. Then, the auditor is off to the next location leaving the report’s recipients feeling like the victims of a hit-and-run audit.
5. Does the audit process and final report add any value for operating management? Sadly, the answer to this question for drive-by audits is often “no.” The reports are frequently very clinical, with no indication of management accomplishments, insight on operations, or opportunities for improvement beyond “these things are not in compliance — fix them.”

I have written extensively over the years of the need to improve the timeliness of internal audit results. Nothing undermines our value more than delivering results when it is too late for management to correct a problem or avoid further fraud, waste, or mismanagement. While drive-by audits are often much faster, the value they provide is sometimes not worth the effort. I would encourage any internal auditor who might be conducting canned inspection-type audits to reexamine your approach. Use the five questions above to transform your internal audits into more risk-based, client-focused engagements.

As always, I welcome your thoughts on this important topic.​​

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