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ACCA Strategic Professional · Strategic Business Leader · Internal control and management reporting

Pelham Pharma is deciding between an in-house internal audit team and outsourcing. The company operates in a highly specialised regulated area and needs auditors with deep, continuous knowledge of its processes, but only occasional access to expert IT security skills. Which approach best fits this need?

A hybrid approach fits best: keep an in-house team for continuous, specialised process knowledge and co-source IT security expertise only when needed. This balances cost, skills and knowledge. Full outsourcing would lose continuous insight, and dropping internal audit would remove independent assurance.

  1. AFully outsource, because specialised knowledge is always better supplied externally
  2. BEliminate internal audit and rely on the external auditor
  3. CKeep an in-house team and co-source specialist IT security skills when requiredCorrect
  4. DUse only management self-assessment to save cost

Explanation

Continuous specialised knowledge favours an in-house team, while occasional expert skills are cost-effectively bought in through co-sourcing. Full outsourcing loses the continuous knowledge, and relying on the external auditor or self-assessment removes independent internal assurance.

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