What does good internal audit look like in housing?

Audit & Assurance

Internal audit plays a critical role in helping housing association boards gain confidence that risks are being effectively managed, controls are operating as intended and strategic objectives can be achieved. However, the expectations of internal audit have evolved significantly in recent years.

Boards are increasingly looking beyond traditional compliance testing and seeking assurance over the risks that matter most, from tenant safety and cyber security to financial resilience, governance and data quality. So, what does good internal audit look like in a modern housing association?

The most effective internal audit functions deliver insight, challenge and practical recommendations that help organisations strengthen governance, improve performance and better serve tenants.

Internal audit should be risk-based

A common misconception is that internal audit should review everything. In reality, good internal audit focuses on the areas of greatest risk and importance to the organisation. A risk-based audit plan should be aligned to:

Strategic objectives
Corporate risk registers
Regulatory requirements
Emerging sector risks
Board and committee concerns

This ensures audit resources are directed towards the areas where assurance is needed most. For example, if tenant safety, cyber security and financial sustainability are identified as key strategic risks, these areas should receive greater assurance attention than lower-risk administrative processes.

Internal audit should support the board's assurance needs

Good internal audit helps boards answer fundamental questions such as:

Are our key risks being effectively managed?
Are controls operating as intended?
Can we rely on the information presented to us?
Are we meeting regulatory expectations?
Are we achieving value for money?

An effective audit programme should be designed around the assurance needs of the Board and Audit & Risk Committee rather than simply following a cyclical programme of reviews.

Good internal audit looks beyond financial controls

While financial controls remain important, housing associations face a broad range of operational and strategic risks. Modern internal audit plans often include reviews of governance effectiveness, risk management, property management, cyber security, data protection, business continuity and people management.

Internal audit should be forward-looking

The best internal audit programmes do not only examine historical activity. They also help organisations prepare for emerging risks. Examples include:

Artificial Intelligence governance
Climate and sustainability commitments
Cyber resilience
Digital transformation
Third-party supplier risk
Regulatory change

What good internal audit looks like in practice

The strongest housing associations typically have internal audit programmes that:

Are aligned to strategic risks
Focus on tenant safety and service delivery
Provide assurance over governance and risk management
Address emerging risks as well as traditional controls
Use data analytics where appropriate
Deliver clear, practical recommendations
Support informed board decision-making
Add value beyond compliance

Questions for boards to consider

Boards may wish to ask:

Does our internal audit plan reflect our greatest risks?
Are we receiving assurance over emerging risks?
Does internal audit provide meaningful insight or simply compliance reporting?
Are recommendations improving controls and performance?
Can we demonstrate that assurance activity supports better outcomes for tenants?

Closing remarks

Internal audit is about providing independent, objective assurance over the areas that matter most to the organisation. For housing associations, this means focusing on key strategic and operational risks, supporting strong governance and helping boards gain confidence that controls are working effectively.

Ultimately, the most effective internal audit functions help organisations move beyond compliance and create a stronger, more resilient organisation that delivers better outcomes for both tenants and stakeholders.

Please get in touch with our Internal Audit Team to discuss how we can support your housing association.

We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information on this page is intended as a general guide only. While we work to keep our content accurate and up to date, we cannot guarantee that it reflects the position at the time you are reading it. No responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm. For more information on our editorial process, click here.

Tom Meeks

Partner

Louis Hobart

Manager

India Payne

Manager

It has been a pleasure working with Price Bailey, they have been professional and collaborative, attending our governance meetings with trustees and working with colleagues across departments. Their planning is really helpful so that we can be clear on expectations and timescales, they work effectively with colleagues to audit respective areas and provide their findings in an accessible and focused report which enables us to continuously improve our activities.

Papworth Trust