Financial Risk Manager

Ways of Financial and Risk Management

10 ways to help audit committees
Tuesday, April 14, 2009

The expanded scope of audit committee responsibilities is daunting. More than ever, top management and boards of directors are being held accountable for identifying, managing, and monitoring company risks.

Audit committees need to oversee accurate financial reporting and disclosure, and help to sustain regulatory compliance, strengthen internal controls, and improve risk management. The increasing stakeholder expectations, along with the desire to make better use of organization monitoring and risk management, call for audit committees to marshal resources in the best ways possible. One resource at which audit committees should be looking for help is internal audit. Here are 10 ways to help audit committees get the most out of internal audit.

Strategy and Alignment

Understand what your charter means and the role internal audit plays in helping you meet your audit committee responsibilities.
Compare the audit committee and internal audit charters side by side, then assess gaps and improve alignment.

Team-building and Competency

Improve the caliber of the chief audit executive (CAE), and help develop the overall quality and stature of internal audit.
Determine if the internal audit budget is sufficient in light of higher standards for internal controls and good governance.

Support

Understand internal audit risk assessments and offer input into the internal audit planning process.
Insist on prioritization of audit issues, along with relevant and timely reporting.
Ensure management accountability and followup of issues identified by internal audit.

Monitoring and Moving Toward Best Practices

Expect internal audit to provide ongoing updates and identify new risks going forward.
Call on internal audit’s help with enterprise risk management and strategic audits (e.g., corporate governance audit).
Sponsor the quality assurance review (QAR) of internal audit and push for continuous improvement.

Labels: Auditing