The roles and responsibilities of an internal auditor have grown, and are integral to addressing your organization’s changing risks and needs.
- Effective communication is the key to maintaining a strong relationship with your audit committee and management.
- A successful internal audit department engages in continual training to develop its skills.
- Address your organization’s changing risks and needs with an effective audit plan.
Is your internal audit department staffed appropriately?
Today’s internal auditor is responsible for much more than reviewing files, completing a wire transfer audit, or assessing controls over investments. They must also build relationships, attend continual training, and develop an effective audit plan to address your organization’s changing needs and risks.
Communicating with the audit committee
Candid, timely, and effective communication is the key to maintaining a strong relationship with the audit committee. Issuing reports on a regular basis, both formally through regular meetings, and informally through phone calls or email is a critical for keeping the audit committee up to date and being responsive to its needs.
Prior to scheduled meetings, provide the committee with an agenda, and include audit reports, a status of your work plan, and relevant industry articles and information.
Communicating with management
While you need to remain independent and objective, you also have to maintain a relationship with management in order to gather necessary information. You may need to:
- Solicit feedback from management in developing an audit plan
- Talk to the appropriate management groups at the start of the audit
- Provide status updates throughout the audit
- Schedule an exit meeting with management to communicate the audit results
Consider including management’s responses in the audit reports — this helps provide context for management’s feedback to your findings.
In addition to excellent communication skills, a successful audit department must have ongoing training to develop audit proficiency, key technical skills, and industry knowledge. Prepare an annual and long-range professional development plan to strengthen these internal skills — or determine if outside professionals are needed.
The department’s supervisor can help determine specific training needs by conducting work paper reviews, surveys of completed audit areas, and periodic assessments of audit staff. You may also seek an independent external assessment of the department to evaluate its’ compliance with standards of professional organizations, such as the Institute of Internal Auditors.
Short- and long-term plans
Because all industries have experienced significant changes due to COVID-19 and the need to operate remotely, it is crucial to develop short- and long-term audit plans to help your organization succeed. Most internal audit departments will prepare a three- to five-year audit plan and update it annually, based on the results of a formal risk assessment.
Strategic planning sessions can help your organization assess how the audit may be affected by operational and strategic risks. Develop an individual audit plan prior to initiating the audit, and consider a risk assessment that specifically addresses fraud. Finally, use an engagement letter to formally communicate the scope of the audit.
How we can help
A successful internal audit department communicates effectively, learns new skills, and prepares for the future. When you need additional experience and resources, CLA can provide support for your internal audit function. Our professionals customize proprietary tools and methodologies to help your organization improve or establish internal audit and risk management functions.
At CLA, we take a holistic approach, bringing integrated insight and services to help you address your broader business challenges.