The Evolution of Internal Audit
Internal audit has transformed from a compliance-focused function into a strategic capability that helps organisations manage risk, improve operations, and strengthen governance. Modern internal audit doesn't just verify controls—it provides insights that inform decision-making and drive improvement.
Audit Managers lead this function. They plan audit programmes, conduct assessments, report findings, and work with management to remediate issues. In the UK, experienced Audit Managers command salaries between £60,000 and £95,000—substantial investments for mid-market companies that may not require continuous full-time audit activity.
Increasingly, forward-thinking mid-market companies are switching to fractional Audit Managers: experienced professionals who provide audit leadership on a part-time, ongoing basis.
The Audit Challenge for Mid-Market Companies
Mid-market companies occupy a challenging position. They're large enough to face complex risks and regulatory expectations, yet may not generate sufficient audit workload to justify a full-time Audit Manager. Many attempt to address this through:
- Relying solely on external auditors (who focus on financial statements, not operational risks)
- Assigning audit responsibilities to finance or compliance staff (who lack audit expertise and objectivity)
- Engaging audit firms for periodic projects (creating gaps between engagements)
- Deferring internal audit entirely (accumulating unaddressed risks)
None of these approaches provides the continuous, expert internal audit function that effective governance requires. The fractional model addresses this gap directly.
What is a Fractional Audit Manager?
A fractional Audit Manager is an experienced internal audit professional who provides audit leadership on a part-time, ongoing basis. They typically dedicate 8-16 hours weekly to each client, maintaining continuity while serving multiple organisations.
Unlike outsourced audit projects that assess point-in-time status, fractional Audit Managers become embedded in your organisation. They understand your operations, maintain the audit plan, track remediation, and ensure audit coverage evolves with business changes.
Key responsibilities include:
- Developing risk-based internal audit plans
- Conducting operational, compliance, and financial audits
- Reporting audit findings to management and audit committees
- Tracking remediation of identified issues
- Advising on control design and process improvement
- Coordinating with external auditors
- Supporting regulatory examinations and reviews
- Assessing fraud risk and investigating concerns
- Evaluating third-party and vendor risks
Top 5 Benefits of Hiring a Fractional Audit Manager
1. Professional Audit Function at Right-Sized Cost
A fractional Audit Manager working 10 hours weekly typically costs £25,000-40,000 annually. Compare this to £80,000-120,000 for a full-time equivalent including benefits and overhead. You establish a professional audit function at 40-50% of the traditional cost.
2. Experienced Perspective
Fractional Audit Managers have typically conducted audits across multiple organisations and industries. They've seen diverse control environments, common failure patterns, and effective remediation approaches. This breadth enriches their assessments and recommendations.
3. Independence and Objectivity
Effective internal audit requires independence from the activities being audited. Fractional Audit Managers bring inherent independence—they're not part of the management structure, don't have historical relationships to protect, and can report findings objectively.
4. Continuous Coverage
Unlike periodic outsourced audits, fractional Audit Managers maintain ongoing presence. They track the audit plan, monitor remediation, and adjust coverage as risks evolve. This continuity ensures audit remains proactive rather than episodic.
5. Board and Investor Credibility
Boards and investors expect internal audit capability. A fractional Audit Manager provides this credibility, demonstrating that the organisation takes governance seriously. This confidence supports funding discussions, partnerships, and board relationships.
How to Hire a Fractional Audit Manager
What to Look For
Prioritise candidates with relevant professional certifications—CIA (Certified Internal Auditor), CISA (Certified Information Systems Auditor), or ACA/ACCA with internal audit focus. Verify experience in your industry sector, as audit risks and regulations vary significantly between sectors.
Assess their communication and relationship skills. Effective Audit Managers must deliver difficult messages constructively, influence without authority, and maintain productive relationships even when findings are unwelcome.
Key Questions to Ask
- What audit methodologies and frameworks do you apply?
- How do you develop risk-based audit plans?
- What types of findings have your audits typically identified?
- How do you handle resistance to audit findings or recommendations?
- What audit management tools and reporting approaches do you use?
Red Flags to Avoid
Be cautious of candidates who focus exclusively on compliance checking without connecting to operational improvement. Avoid those who view audit as adversarial rather than collaborative. Question anyone who dismisses the importance of following up on remediation.
Strengthen Your Governance
Internal audit provides the independent assurance that effective governance requires. It identifies risks before they materialise, validates that controls work as intended, and drives continuous improvement.
A fractional Audit Manager makes this capability accessible for mid-market companies. At fractional.quest, we connect UK businesses with experienced Audit Managers ready to strengthen your governance.
Browse our network of verified Audit Managers and establish the audit function your organisation needs.