Opinions supported by either experience or independence standards is sought for the issue of whether a company with two subsidiaries should have the internal audit activities organized in which, if any, of the following ways (NOTE: Please specify whether or not it would matter if the subsidiaries did business with one another):
1. There is one internal audit function with an Internal Audit Director and 2-3 staff. They perform audits at both organizations. The Internal Audit Director reports directly to an Officer of the Parent Company.
2. There is an Internal Audit Director of the Parent Company and Internal Audit Managers of each subsidiary. The Managers report to the Director who then reports to another Officer of the Parent Company.
3. There is an Internal Audit Manager/Director at each subsidiary that reports to an Officer of the Parent Company.
4. The internal audit functions are maintained completely separate.
The objective of scenario 1 and/or 2 above would be to gain efficiencies and to have the two entities work more closely together.
Thanks,
David
