Key questions for audit committees to ask about internal audit 

Internal Audit image

An effective relationship between the audit committee and internal auditors is fundamental to the success of the internal audit function. It has become increasingly important for audit committees to assess whether internal auditors are monitoring critical controls and identifying and addressing emerging risks. Internal audit will be more successful if the chief audit executive (CAE) understands the expectations of the audit committee and management and if expectations are aligned.

Key questions for audit committees to ask about Internal Audit:

1. Does Internal Audit have a clearly articulated strategy that is reviewed periodically
and approved by the audit committee?

2. Does Internal Audit have a clear set of performance expectations that are aligned with the success measures of the audit committee, and that are measured and reported to the audit committee?

3. Is Internal Audit appropriately funded and staffed? Is Internal Audit staffed with the
appropriate mix of professionals to achieve its objectives? For example, CPAs with
prior public accounting experience, industry experience, IT specialists, etc.

4. Does Internal Audit have a charter that is periodically reviewed and approved by
the audit committee?

5. Does Internal Audit operate in accordance with its charter?

6. Is Internal Audit sufficiently independent of management?

7. Does Internal Audit organize or perform peer reviews or self-assessments of its
performance and report the results to the Audit Committee?

8. Is the level of assurance provided by Internal Audit and interaction with other
assurance sources clear and appropriate for the audit committee?

9. Does Internal Audit meet regularly with the external auditors to discuss risk
assessments, scope of procedures, or opportunities to achieve greater efficiencies
and effectiveness across the company’s audit services?

10. Is the Internal Audit plan aligned to the key risks of the organization and other
assurance activities? Is Internal Audit’s risk assessment process appropriately linked
to the company’s Enterprise Risk Management activities?

11. Are issues identified and reported by Internal Audit appropriately highlighted to the
audit committee, and is their progress to effective completed management actions
tracked and reported?

12. In delivering the annual internal audit plan, is Internal Audit flexible and dynamic in
promptly addressing new risks and the needs of the audit committee?

13. Is the work of Internal Audit timely and proactive in the conduct and reporting of
issues and addressing them with management?

14. Are reports and other communications from Internal Audit to the audit committee
of an appropriate standard of presentation and value provided?

15. Is the CAE respected as an advisor to the audit committee and management on
emerging risks of the organization?

16. Is Internal Audit highly regarded and respected within the organization?

Source: Deloitte

Leave a Comment


Broker Cyprus TopFX