Because internal audit teams play a critical role in keeping a company’s governance, risk management and compliance processes in check, they’re in a prime position to help guide overall business strategy.
However, one challenge that can stand in their way is ineffective communication and reporting.
Because risk can be so devolved, many groups within an organization tend to drift away from common standards and use their own ways to talk about risk. This makes it more difficult for audit, risk and other committees to work together effectively.
But with the right reports, auditors can uncover new insights and better interact with other parts of the business.
Here, we’ll explore how internal audit teams can “speak the board's language” for maximum impact and better leadership.
How Audit Teams Can Successfully Speak the Board’s Language
Here are six ways that internal audit teams can make sure their reports resonate with the board and lead to positive change throughout the organization.
Standardize the Language
In order for risk and audit teams to work together constructively, there must be a common language with definitions of risks and controls in place, as well as common goals that everyone understands.
This focus will not only help realign audit plans, but also make it easier to compare risks across departments and assess them against a common framework, keeping more risks at bay.
Wherever possible, teams should streamline efforts by using templates or toolkits that have already been working well.
In addition to using standardized language, all documentation should be updated to reflect the way the audit team wants people in their organization to talk about risk.
Include Analysis, Not Just Data
In keeping with standardized language, audit reports should include analysis in addition to data.
While members of the internal audit team may perfectly understand the numbers they’ve presented in a report, that doesn’t mean those figures will translate for other teams.
Because audit reports should ultimately improve transparency and lead to meaningful insights, internal audit teams should strive to provide boards with more clarifying information about complex statistics, as well as the context behind how that data was obtained.
Internal audit teams should regularly check for gaps in risk coverage. If there are any significant risk areas that might be falling outside the oversight of the risk committee, audit teams should check that they are being picked up elsewhere.
Losing sight of big risks is a very real danger, as it’s easy for certain areas to fall between the cracks when others are in the spotlight. Audit teams can support risk teams as a third line of defense by stepping back and considering which threats might lie outside the risk team’s oversight.
Facilitate a Feedback Loop
Audit and risk teams don’t have to work in silos. Both have distinct jobs and duties, but communication between the two is essential in order to ensure that no threats slip through the cracks.
Having a feedback loop in place for audit teams to give and receive feedback from other areas — especially risk, compliance and other board committees — can lead to all-around improvement throughout the organization.
Build Deeper Visibility
Technology can be a huge help when it comes to facilitating communication through dashboards, user-friendly templates and other features that make reporting and collaboration smoother.
It can also help to build deeper visibility for the board and executive teams, with risk-based dashboard reporting updated in real time for audit committees.
Enhanced visibility means that more teams are able to access the same information, and therefore better collaborate to resolve issues and mitigate risks.
Turn Audits into Action
When it comes to internal audits, management and the board can decide whether or not to make policy changes based on an audit’s findings.
Internal auditors must ensure that management and the board understand the risks of not taking action; and if action is to be taken, the internal audit team can use their unique insights to help guide next steps and serve as a strategic adviser to the board and management.
Enlist the Help of an Audit Management Solution
Mature internal audit programs no longer rely on spreadsheets to track data and compile their reports. Rather, they enlist the help of sophisticated technology that can streamline their processes and make them stronger partners to the board and other areas of the business.
Audit management software can help audit teams build executive confidence in their audit program through increased visibility and insights that contribute to agile decision-making.
Digital solutions like Diligent Audit Management allow internal auditors to gain unique insights while using automated workflows to save valuable time and drive clear reporting.
Learn more about what Diligent Audit Management can do for your organization by scheduling a demo.