Brink's Modern Internal Auditing

CHAPTER 25 Board Audit Committee Communications

Other chapters have talked about how to execute and manage many internal audit processes and procedures as well as internal audit common body of knowledge (CBOK) information needs and knowledge areas. Internal audit’s reporting relationship to the board of directors’ audit committee presents a different challenge to all members of the internal audit team. Internal audit reports to the audit committee, which approves its overall planning activities and reviews the results of internal audits. However, the relationship here is often a bit different from a classic supervisor/subordinate type of relationship. Although they are much more active since the launch of the Sarbanes-Oxley Act (SOx), members of an audit committee also have other board of directors responsibilities and usually will not be present in enterprise operations on a day-to-day basis. Internal audit’s chief audit executive (CAE) is often the main contact with the audit committee and frequently must educate and advise the committee on internal auditing issues. Although it is an evolving issue, many audit committees understand the financial reporting issues associated with their external auditors but sometimes view internal audit as an almost unfamiliar resource.

This chapter will review the role of today’s audit committee and its responsibilities for internal audit. We will discuss its roles in approving the audit charter, appointing the CAE, approving audit plans, ...