"Internal auditors walk a fine line when presenting recommendations to management."
One of the ways internal audit adds value to the organization is through the recommendations communicated in internal audit reports. But recommendations also can become a point of contention with management, as they may suggest additional procedures for staff or offend management if not presented correctly. Therefore, auditors should take care to communicate with the various stakeholders how their recommendations will help fix gaps and mitigate risks. The stakeholders will evaluate whether the recommendations being provided are worth the investment of time and resources required to implement them (cost vs. benefit).
Broadly, a recommendation is either a suggestion to fix an unacceptable scenario or a suggestion for improvement. Most internal audit reports provide recommendations to fix unacceptable scenarios because they are easy to identify and are less likely to be disputed by the process owner. However, recommendations to fix gaps in a process only take the process to where it is expected to be and not where it could be. Internal audit’s value lies not only in providing solutions to existing issues but in instigating thought-provoking discussions. Recommendations also can include suggestions that will move the process or the department being audited to the next level of efficiency. When recommendations aimed at future improvements are included, internal audit reports become a tool in shaping the strategic direction of the department being audited.
Download the PDF The Art of Recommending, Internal Auditor October 2016, including very practical take-aways.