Global Perspectives and Insights Issue 6
The increasing importance of internal audit’s role as the third line of defense in effective risk management and control has raised its visibility both within and outside of the organization. As a result, chief audit executives (CAEs) and internal audit departments are looking for ways to utilize their unique expertise to enhance their value to the overall corporate mission. This leads to the question — asked by all high performing support areas such as finance, human resources, IT, and legal — how can we have a strategic impact on the organization?
Internal audit is uniquely positioned to be a strategic partner. With reporting relationships to the chief executive officer (CEO) or other executive officer, audit committee, and the board, high performing CAEs combine intelligence, expertise, diligence, and curiosity in a manner that positions internal audit for a critical strategic role. Despite this, CAEs are not generally recognized for the potential strategic impact that they can have on their organizations. For CAEs looking to elevate the strategic role of internal audit, several questions should be answered to take this next logical and desired step. Does the CAE understand the strategic mission of the organization at a deep level? Does the CAE understand the perspective of the CEO and board and make the effort to become a trusted partner, offering advice and solutions that address key problems? Is internal audit aligned with the strategic mission? Is internal audit anticipatory and proactive (rather than reactive)? Does the CAE provide assurance on risk management?
Unfortunately, traditional perceptions of internal auditing can lead to wariness on the part of others to embrace internal audit as a strategic partner. Further, internal audit must balance the independence that is required for its role against the level of involvement in the tactical duties necessary to achieve the organization’s goals. After all, it is the mandate of internal audit to assess these tactics. But proactively addressing these challenges can lead to a real opportunity for internal audit to be recognized as a strategic partner and contributor.
Download Global Perspectives and Insights: Elevating Internal Audit’s Strategic Impact