In: Accounting
which of the following areas of culture presents the greatest challenge for internal audit functions who want to become trusted advisors?
The Head of Internal Audit should raise his or her pro le within
the organisation through the gure of trusted advisor be- cause, by
not doing so, there exists the risk of falling out of the loop
regard- ing the organisation’s strategy and los- ing control over
the decisions reached, thereby becoming an irrelevant gure that can
only act after the damage has already been done.
Heads of Internal Audit should adopt a proactive attitude in this
regard because they have the perfect characteristics for performing
this task. However, certain signi cant barriers within the
corporate culture must be broken down beforehand.
First of all, it is necessary to gain the con- dence of management
by demonstrat- ing that they are not only providers of assurance
but can also offer other value added services. The Head of Internal
Audit should raise awareness of his or her prod- uct within the
organisation via an internal marketing programme if
necessary.
Secondly, they should gain the con - dence of management by
including exec- utives in the work to draw up the Annual Plan,
providing them with information and responding to the work they
request. In short, by involving them in the control
environment.
It is also essential to have suf cient back- ing to undertake this
work. The Audit Committee itself should support the Head of
Internal Audit, and will be decisive in the relationship created
between him and the top executives at the organisation.
The Audit Committee should ask the Head of Internal Audit about
which ac-
tivities are being undertaken to achieve this goal at least once a
year. The main purpose of a trusted advisor within the organisation
will be to help management make decisions.
Participation by the Head of Internal Au- dit on the Executive
Committee will be the ultimate demonstration of trusted advisor
status, helping improve under- standing of the organisation’s
strategy plan and development of the business.
The work of the Head of Internal Audit will be to help management
make de- cisions based on knowledge, the use of technology and good
data quality, which enable reliable information.
Whenever management debates an is- sue, it is important to have
complete and reliable information. However, the most complicated
aspect is that these deci- sions must often be made within a very
short timeframe. Such decision-making processes require various
alternatives to be assessed, targets sought and a careful analysis
of the consequences that could arise for the business and the
organisa- tion’s assurance structure.