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Home > Auditing Best Practice > How Can Internal Audit Report Effectively to Its Stakeholders?

Auditing Best Practice

How Can Internal Audit Report Effectively to Its Stakeholders?

by Andrew Cox

Conclusion

Internal audit has a responsibility to its stakeholders to provide reports on the operations of the organization’s risk management, control, and governance processes. It also has a responsibility to justify the value of its work and the organization’s spending on internal audit resources.

Internal audit can do this in two ways:

  • By reporting on the outcomes of its internal audit work.

  • By reporting on the quality of its internal audit work.

Making It Happen

The chief audit executive should develop effective reporting mechanisms with the audit committee and other stakeholders. Key reporting tools include:

  • Insightful internal audit reports.

  • Monitoring of internal audit recommendations, and periodic follow-up to ensure that recommendations have been implemented effectively and in a timely way.

  • An internal audit communication strategy.

  • An annual internal audit report that covers achievements in the year, an analysis of systemic issues identified through the work of internal audit, and an opinion

  • on the organization’s overall risk management, control, and governance environment.

  • on the organization’s overall risk management, control, and governance environment.

  • A quality assurance and improvement program that incorporates both internal and external assessments.

  • Key performance indicators measuring the performance of internal audit.

  • Periodic review of internal audit by external auditors and, where applicable, regulatory bodies.

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Further reading

Books:

  • Australian National Audit Office (ANAO). Public Sector Internal Audit—An Investment in Assurance and Business Improvement. Canberra: ANAO, September 24, 2007. Online at: www.anao.gov.au/director/publications/betterpracguides.cfm
  • Reding, K. F., et al. Internal Auditing: Assurance and Consulting Services. Altamonte Springs, FL: Institute of Internal Auditors Research Foundation, 2007.
  • Sawyer, Lawrence B., Mortimer A. Dittenhofer, and James H. Scheiner. Sawyer’s Internal Auditing: The Practice of Modern Internal Auditing. Altamonte Springs, FL: Institute of Internal Auditors, 2003.

Standards:

Websites:

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