January 1, 2018
Fuente: Journal of Accountancy
The expectations and standards set by a company’s audit committee can go a long way toward helping any chief audit executive (CAE), on a rotation or otherwise. Here are some considerations for companies in ensuring the success of a CAE who might come from another part of the organization, according to Richard Chambers, the president of The Institute of Internal Auditors (IIA); Bonnie Hancock, the executive director of North Carolina State University’s Enterprise Risk Management Initiative; and Bailey Jordan, CPA, a Grant Thornton partner whose focus is risk, governance, and compliance:
1 Consider several candidates, especially if the company is thinking about naming a CAE from inside the organization. It’s impossible to make an objective choice if management offers just one candidate.
2 Make sure the CAE isn’t in a position to “self-audit.” While this seems obvious, it’s important to set procedures that ensure there is not a conflict of interest. A one-year cooling-off period can help: The department for which the CAE recently worked can, of course, be audited, but the CAE must not be part of that audit.
3 Ensure a proper reporting structure. The IIA and other organizations recommend that the CAE not report to the CFO because that relationship calls into question the CAE’s objectivity and independence in reporting on finance matters. Ideally, experts say, the CAE would report to the audit committee. CAEs must also adjust to having two bosses — the audit committee and the C-suite — so they understand the expectations and priorities of both groups.
4 Don’t set an end date for the CAE’s time in the role. Instead of saying, “In three years, you’re moving on,” tell the CAE: “You probably will move somewhere else in the company, but we don’t know when or if that will happen.” In other words, make no guarantees.
5 Make sure the team behind the CAE is strong. The internal audit team must have solid expertise to support the less-experienced leader. “Having broad audit expertise would serve to address the risk of the head auditor not having as much experience,” Hancock said. Additionally, Jordan said, new CAEs should receive education on items such as the IIA’s International Standards for the Professional Practice of Internal Auditing. The company should have members of internal audit already using that and other guidelines.
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