Advisory

KPMG in the Czech Republic

Internal Audit

Emerging and constantly changing business risks can have a significant influence on the
operation of your company. Whether they arise from globalisation, geopolitical influences,
demographic trends, market and economic pressures, changing technology, environmental
issues or regulatory requirements, these risks need to be effectively managed.
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Internal Audit / Advisory / November 2013

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If a company fails to do so and has incorrectly designed

processes, poor project management and insufficient
information for executive decision making, it may incur
significant losses.
The aim of the internal audit function is to achieve an
acceptable level of risk and minimise losses. However,
the establishment of an effective internal audit function is
often hampered by a lack of experienced professionals with
adequate technical knowledge and by incorrectly designed
processes within the internal audit function. Additional
barriers include insufficient cooperation with management,
poorly defined objectives of the internal audit function,
and communication constraints.
We can help you overcome these issues and develop
an internal audit function that will meet your needs and
add value to your organisation.

1. Assessment of the internal audit function (KSPRint)

Does the quality of services provided by the internal audit function fail to meet your expectations?
Are you concerned that your internal audit is not sufficiently focused on risk areas?
Do you have doubts about the effectiveness of your internal audit function?
In the past five years, has your internal audit function not been subject to an external quality review,
which is required by international standards?
Our professionals can help you by
Conducting an independent performance review of your companys internal audit function;
Using the KSPRint (KPMG Strategic Performance Review of Internal Audit) methodology developed by
an international group of KPMG specialists;
Obtaining input data for the review through interviews with members of the board of directors, the audit committee,
the supervisory board, management and the internal audit team, and by analysing audit documentation and reports;
Assessing the positioning, organisational integration, human resources and internal processes of your
companys internal audit function;
Comparing the current state of the internal audit function with industry best practice, the experience of our
professionals, and with the expectations of your companys management and members of the statutory
and supervisory bodies;
Proposing practical measures enabling you to close the gap between the current and desired performance
of your internal audit.
How you will benefit from our services
You will obtain an objective and independent assessment of the current internal audit function in the
context of KPMGs international experience.
The expectations of the companys management and members of the statutory and supervisory bodies
with respect to the internal audit function are clarified.
You can compare your internal audit function with similar businesses in your industry.
You will learn how to achieve the desired internal audit function.

2. Establishing/improving the internal audit function

Does your company have the obligation to establish an internal audit function due to regulatory requirements?
Do your shareholders or the supervisory board request the establishment of the internal audit function?
Has your companys management decided that an internal audit function needs to be established, in view of the
companys size and risk profile?
Does the internal audit function fail to meet the quality requirements of the statutory and supervisory bodies?
Have significant organisational changes been made within the internal audit function and/or has the internal audit
mission been changed?
Our professionals can help you by
Designing the framework of the internal audit function, tailored to your companys situation and the requirements
of the statutory and supervisory bodies;
Proposing the design of or modifications to internal audit processes, in order to increase internal audit efficiency;
Working with you to implement measures that will increase the effectiveness of the internal audit function;
Consolidating your internal audit procedures into a manual;
Selecting suitable candidates for the internal audit work, and helping with their training and further development.
How you will benefit from our services
You can implement a modern internal audit model based on a comprehensive methodology.
When establishing an internal audit function with our support you save time, money and human resources.
You can select suitable professionals for your internal audit department and plan their development.
The effectiveness and added value of your internal audit function is increased.
Internal Audit / Advisory / November 2013

3. Outsourcing and co-sourcing of internal audit

Do the statutory and supervisory bodies seek assurance in respect of the risk management system and internal
processes, but it is not effective to have an in-house internal audit function due to the size of your company?
Due to the limited number of internal auditors, do you lack the capacity to perform certain regular and/or special tasks?
Do your internal auditors lack certain specialised knowledge and experience required to carry out technically
sophisticated audits?
Does your company have international operations, the audit of which requires specific knowledge of the local conditions
as well as language skills that your internal auditors lack?
Our professionals can help you by
Providing you with the full outsourcing of internal audit services;
Offering you partial outsourcing (co-sourcing) that will enable your internal audit team to utilise our knowledge base,
additional capacity and modern methodology;
Providing you with expertise in IT/IS, financial instruments, forensic services, service provider audits, etc., based on the
specific requirements of technically challenging audits;
Supporting you in auditing your international operations; if the KPMG network has its office in a particular country, we will
use the knowledge of our foreign-based professionals.
How you will benefit from our services
Internal audit costs are converted from fixed to variable costs, which can be flexibly managed as part of the outsourcing
arrangement.
Your capacity needs relating to unplanned audits are met.
You can make use of the professional experience of our specialists in technically sophisticated areas and for audits
of your international operations.
The quality of your internal audit function is increased through the combination of your internal auditors knowledge
of the company and the independent perspective of our professionals.

4. Major projects assurance

Is your company running a major project whose failure could jeopardise the achievement of strategic objectives?
Is the project so complex that your company does not have sufficient capacity and/or technical capabilities to control it?
Are you worried that a project is not adequately managed or that external suppliers do not meet contractual conditions?
Is there uncertainty as to whether funds spent on a project were used effectively?
Do you need an analysis by an independent specialist for negotiations with third parties, to address issues related
to a project?
Our professionals can help you by
Analysing the project plan quality and project management arrangements prior to launch;
Independently reviewing the fulfilment of contractual conditions by suppliers for individual project stages and/or
for the completion stages;
Assessing whether funds have been spent in line with the project plan and budget.
How you will benefit from our services
You will control the fulfilment of objectives, and conditions and deadlines of major projects.
Project costs are kept under control.
You will obtain supporting materials for negotiations with third parties participating in a project.
The efficiency of project management is increased through practical recommendations.

Internal Audit / Advisory / November 2013

Internal audit is an independent,

objective assurance and consulting
activity designed to add value
and improve an organisations
operations. It helps an organisation
accomplish its objectives by
bringing a systematic, disciplined
approach to evaluate and
improve the effectiveness of
risk management, control, and
governance processes.

The Institute of Internal Auditors

Contacts
Pavel Zvitkovsk
Partner
Audit
T: +420 222 123 125
E: pzavitkovsky@kpmg.cz
Michal up
Associate Manager
Advisory
T: +420 222 123 331
E: mcup@kpmg.cz

Zuzana Kitto
Associate Manager
Advisory
T: +420 222 123 264
E: zuzanakitto@kpmg.cz

The information contained herein is of a general nature and is not intended to address the
circumstances of any particular individual or entity. Although we endeavor to provide accurate and
timely information, there can be no guarantee that such information is accurate as of the date it is
received or that it will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough examination of the particular situation.
2013 KPMG esk republika, s.r.o., a Czech limited liability company and a member firm of the
KPMG network of independent member firms affiliated with KPMG International Cooperative
(KPMG International), a Swiss entity. All rights reserved.
The KPMG name, logo and cutting through complexity are registered trademarks or trademarks
of KPMG International.
The reference to KPMG Czech Republic includes all companies associated with
KPMG in the Czech Republic.
Designed and produced by KPMG esk republika, s.r.o.

www.kpmg.cz

Printed in the Czech Republic.

November 2013