Credit union auditor objectivity: In-house versus outsourcing

by. Cynthia Rogstad

When it comes to having internal audits performed at your credit union, you have options. Some credit unions have internal auditors on staff, while other credit unions elect to outsource their internal audits. Both options provide unique benefits; it is simply a matter of what works best for your credit union.

Benefits of an in-house internal auditor:

• Should have a better understanding of the day-to-day procedures and operations of the credit union.
• Should have a better understanding of the personalities, mannerisms, and politics among members, staff, and management.
• Should be well versed about the credit union’s systems, software and programs.
• Should be more familiar with policies and procedures since they are working with them on a daily basis.
• If the internal auditor witnesses certain practices, then the auditor can immediately adjust the scope and size of a particular audit.
• If the internal auditor suspects suspicious behavior, he/she can examine an account or a department as soon as they become suspicious.

There are many great qualities of having a full-time in-house internal auditor; however, four concerns may remain which are: To whom does the internal auditor report, the internal auditor developing a relationship with fellow employees which may prevent them from fully vetting a situation that would normally be investigated if no relationship existed, reviews unnecessarily being expanded without an increase in audit value, and the internal auditor being tasked with special projects.

While there are benefits unique to an in-house internal auditor, there are also numerous benefits to outsourcing your credit union’s internal audits.

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