In some companies, the role of Internal Audit is insufficiently recognized. The Audit Committee, in consultation with senior management, may emphasize the essential role of Internal Audit by strengthening its image and communicating its value.
The Audit Committee may take this initiative given its position as the functional boss of Internal Audit.
What actions and checks should the Audit Committee carry out?
- The Audit Committee maintains an open and transparent relationship with the Chief Audit Executive.
- The Audit Committee reviews and approves the Internal Audit Charter.
- The Audit Committee obtains clear and relevant information from Internal Audit on the strengths and weaknesses of the company’s internal control system and risk management.
- The Internal Audit department has sufficient competent resources to carry out the annual audit plan.
- Internal audit reports are usable, and audit recommendations are satisfactorily implemented by management.
- The Internal Audit activity is independent, as it reports functionally to the Audit Committee and hierarchically to General Management.
What questions does the Chair of the Audit Committee ask him/herself?
- Is Internal Audit functioning in a visible and audible way? Does it occupy the place desired by the Audit Committee?
- Is the relationship with managers conducive to change? Are the auditors “change agents”?
- Does Internal Audit contribute to protecting the company from new risks?
- Do I invite the Chief Audit Executive to strategic orientation meetings? medium-term planning meetings? risk management meetings?