Excerpt from Term Paper:

...... There has been an increased interest in corporate governance in recent years. Organizations now more than ever need to effectively manage a varied array of risks, which illustrates the expanding opportunities for the internal audit function. Much of this has been triggered by the recent financial reporting scandals. This has also led to subsequent legislative and professional responses to these scandals. Both results further highlight how important internal audit is, as a critical resource, for organizational management. For this reason, managing both the quality and costs of the internal audit is a key component of management fulfilling its responsibility to providing a sound governance system (Carey, Subramaniam, Chua, and Ching)
Outsourcing of internal audit functions has been facilitated by two primary factors. Increases in information technology has made it easier for both large accounting firms and independent internal audit providers, to offer their services competitively. This, as well as the previously noted increased importance of the internal audit function, due to recent corporate scandals and a demand from stakeholders for increased internal auditing, has led to a increased usage of specialized internal auditing companies, by organizations. This trend has sparked a discussion on the pros and cons of outsourcing

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