As audit committees face a wider range of business risks and increased expectations from stakeholders, many audit committees are turning to a particular resource—the internal audit function. Internal audit (IA) can be viewed by committee members as an objective insider—one that can serve as their eyes and ears.
Maximizing the value proposition of the internal audit group is an effective way to help audit committees address their risk oversight responsibilities. However, getting full value from the function isn’t easy: 62% of stakeholders expect more value from internal audit, according to PwC’s 2016 State of the Internal Audit Profession Study. Here, we outline how audit committees can get the most out of internal audit.
The key things to focus on for internal audit oversight:
- Empowering the role,
- Having a team with the right structure and skills,
- Making sure the mission is clear and is adhered to,
- Supporting findings to drive organizational improvements, and
- Assessing performance of the team to enhance talent development.
NYSE-listed companies are required to have an internal audit function with oversight by the audit committee. Nasdaq-listed companies do not have this requirement, although many choose to have an internal audit function.