Abstract:
There has been an increase in corporate failures over the past two decades, which have
been attributed to governance failures. In particular, inadequate risk oversight by boards
has been cited as the main cause of these failures. Combined assurance has emerged
as a mechanism that can assist boards to exercise their risk oversight role. This entails
different assurance providers working together to align their assurance activities, in
order to provide boards with a holistic view of the risk and control and environment of
the organisation. However, many organisations are finding it challenging to implement
combined assurance due to a lack of guidance regarding why they need to do this, what
they need to succeed, implementation approaches, and if there are benefits that can be
achieved. The aim of this study is to understand the drivers, success factors, methods/
ways used to implement combined assurance and the benefits thereof. In particular, if
the benefit of enabling boards to exercise their risk oversight is being achieved.
Qualitative research methods were used to explore the concept of combined assurance.
Fourteen semi-structured interviews were conducted face to face with participants who
had experience in implementing combined assurance. The participants were either
Heads of assurance functions in the Internal Audit, External Audit and Risk departments;
risk and assurance consultants; or independent directors who chaired either the Risk or
Audit Committees. The participants represented six different industries, namely the
Financial, Consulting, Printing, Mining, Property and Motor industries. The data
collected during the interviews were analysed using thematic analysis.
The findings from the study demonstrate that there are internal and external drivers
causing organisations to adopt combined assurance, such as the existence of oversight
committees and compliance with governance standards respectively. Buy-in from
stakeholders, a common methodology, a mature Risk function and a strong coordinator
are some of the key success factors noted as being required to implement combined
assurance successfully. Furthermore, the combined assurance map, joint assurance,
alignment of assurance activities and coordinated reporting emerged as the
implementation approaches being used in organisations. Moreover, benefits such as
preventing duplication of effort, focus and deepening understanding of risks and
consistent messaging were some of the benefits found in this study. More importantly,
the study demonstrated that combined assurance enables boards to exercise their risk
oversight role effectively.
