Quality assurance and improvement program: some considerations for central banks

Abstract

PurposeQuality Assurance and Improvement Program (QAIP) is defined as “an ongoing and periodic assessment of the entire spectrum of audit and consulting work performed by the internal audit (IA) activity”. QAIP is an important component of internal auditors’ commitment to improve internal audit (IA) quality. The pressure towards improvement is urgent for central banks, in light of the vulnerabilities of their IA functions identified by the International Monetary Fund. The authors analyse the professional standards and the literature on IA and QAIP, aiming to propose general considerations to enhance IA quality and to develop and maintain a QAIP, with reference to central banks, also shedding light on the synergies among IA, QAIP and total quality management (TQM).Design/methodology/approachThis paper reviews the most relevant professional standards in light of the professional and academic literature regarding IA quality, QAIP and their relationship with TQM. The analysis of these sources represents an important step to identify general measures to improve IA quality and develop effective QAIP in central banks.FindingsThis analysis shows that it is important to understand the rationale behind the development of an IA function and its theoretical and practical foundation, especially for complex organisations such as central banks. In addition, the authors show that QAIP represents an important tool to exploit the synergies between TQM and IA. These synergies could result in higher levels of quality for the IA function and more effective implementation of TQM within the whole organisation. Lastly, the authors provide practical suggestions to support the implementation of an effective QAIP in central banks and to spread TQM philosophy within the organisation.Originality/valueThe authors contribute to the scant literature on IA quality and QAIP by focusing on central banks and shedding light on the relationship with TQM. Regardless of their importance, these topics have been largely neglected by the extant literature.