Call for internal audit and finance team collaboration

The Chartered Institute of Internal Auditors (IIA) and International Federation of Accountants (IFAC) have collaborated on a research study which aims to encourage closer working between the internal audit function and finance function in order to ensure effective governance

The report takes the pulse of 11 governance experts and thought leaders to examine the crucial roles both internal audit and the finance function play in maintaining a sound system of corporate governance, which the two bodies say is the outcome of a mosaic of organisational policies, processes, and cross-functional interactions.

The report identifies several key requirements for effective governance, including having an ethical corporate culture that empowers effective leaders throughout the organization to carry out good governance processes.

Companies also require effective communication and collaboration among the various roles and need to ensure requisite competencies for internal audit and the finance and accounting functions to earn stakeholder support and respect.

Richard Chambers, IIA president and CEO, said: ‘Collaboration and cooperation between internal audit and the finance function is crucial to ensuring good governance. Only by recognizing their distinct roles and the value in their successful interaction can organisations fully leverage the services they provide.’

The report notes that, because the two functions have complementary roles, their overlapping duties may help to avoid gaps in governance. Importantly, the experts demonstrate the need for both internal audit and the finance function to have champions within and outside the organization who advocate for their importance and value.

Chambers said: ‘Internal audit needs to be its own champion and work to articulate the benefits of including internal audit in the governance process. Stakeholders [executive management and the board] who understand the complex interactions and relationships that influence governance are best positioned to help their organisations succeed.’

United, Connected and Aligned: How the Distinct Roles of Internal Audit and the Finance Function Drive Good Governance is here

Report by Pat Sweet

 

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