Internal audit departments occupy a distinctive position within an organization, being one of the few groups with direct access to both the board and the audit committee. An effective internal audit department is one that can collaboratively work with the audit committee as a strategic partner in enterprise governance. However, a world-class internal audit department goes beyond these expectations.
Adhering to best practices, the audit committee should possess a comprehensive understanding of the organization's current state and the tasks carried out by the audit team. The Institute of Internal Auditors (The IIA)1 reinforces this notion with the following statement: “Inherent in the audit committee charter is its responsibility for monitoring and reviewing the performance of the internal audit activity. Because the input of the internal auditors is so critical to the success — and potentially, the very survival — of an organization, it is important for the audit committee to have a clear picture of the internal audit activity’s performance, and ensure that it is functioning well.”
Unfortunately, leaders in internal audit frequently face challenges in effectively communicating this information to the audit committee. By placing emphasis on the presentation of data, it becomes feasible to enhance the value that internal audit brings to the committee, consequently augmenting the audit committee's overall value to the organization.
- What should be included in an audit committee presentation?
- What audit topics are appropriate to present?
- How often should the audit committee present?
- Who should they present to?
What should be included in an audit committee presentation?
A crucial element in assisting the audit committee in establishing organizational priorities lies in the volume of information presented to them. Internal audit should exercise caution, ensuring not to inundate the committee with excessive details.
Effective presentation methods must also be identified and applied. As a fundamental approach, incorporate a summary of the information. Supplementary details can be included in an appendix accompanying the summary. It's crucial to bear in mind that audit committees usually have a restricted timeframe for reviewing data, so ensure brevity and deliver essential reports well ahead of any scheduled meeting.