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Do not expect all the audit committee members to possess sufficient accounting ,audit and risk management knowledge and experience . In a perfect world it would be great if they do ! As we don't live in such a world ,someone should take the initiative to educate them ,and I believe that this " someone " should be the CAE ! During the brief period when I established and managed an internal audit activity for a multi - billion dollar company ,I took it upon myself to keep open communication lines with management in general and the audit committee in particular in order to keep them abreast of developments in areas relevant to their responsibilities .In the case of the audit committee ,I used to share with them news,articles and publications relating to accounting,audit ,risk management ,corporate governance and other areas of interests . And to make things more interesting ,I used to send them a monthly quiz ! I was pleasantly surprised with the positive reaction of the committee members and their desire to receive more information and quizzes ! In fact ,they were competing to score higher points each time I send a new quiz . I am fully aware that not all audit committee members will act in the same way, but the CAE should at least try and fulfil this educational role . It not only benefits the audit committee members and the organization ,but helps to strengthen the CAE's relationship with the audit committee.
Yes, agree with explanation
Unfortunately there are several rules that you have to remember before having any presentation or communication with the Audit Committee:
1. Most of them are not auditors and don't understand "audit terms"
2. They are busy people and only want to know a very high level overview of controls
3. They would like to hear positive things and don't like negativity.
4. their attention only lasts for about five minutes into your speech and then they begin checking stock quotes and text messages. That means that you are done.
5. They feel that they own you and don't like to be quizzed or confronted.
7. They appreciate the form over the matter, so dress sharp and speak flawless language.
As a CAE, he can definately share his knowledge and inputs with the audit committee members for them to decide as the final decision maker. he can provide them with his views, but this should not be taken that it is CAE responsibility by any law to educate them.
Educating the audit committee is a key responsibility of the CAE and helps ensure the committee understands and supports the internal audit function. This education enhances collaboration, empowers the audit committee to provide effective oversight, and ensures internal audit is properly resourced and aligned with the organization's strategic and risk management priorities. By keeping the audit committee informed and engaged, the CAE strengthens the overall governance framework.
Yes, the Chief Audit Executive (CAE) should actively educate the audit committee. This education is vital for several reasons:
Understanding the Internal Audit Function: The CAE can provide insights into the role, responsibilities, and methodologies of the internal audit function, helping the committee appreciate its value and contributions to the organization.
Risk Awareness: By educating the audit committee about the organization’s risk landscape, the CAE can ensure that members understand key risks and how internal audit prioritizes its work to address them effectively.
Regulatory and Best Practices: The CAE can inform the committee about relevant regulatory requirements, industry standards, and best practices in internal auditing, promoting compliance and enhancing governance.
Performance Metrics: Educating the audit committee about performance metrics and key performance indicators (KPIs) for the internal audit function enables informed discussions about its effectiveness and alignment with organizational objectives.
Facilitating Informed Decision-Making: A well-informed audit committee can provide better oversight and support for the internal audit function, leading to more effective governance and risk management practices.
Enhancing Collaboration: Education fosters a better working relationship between the CAE and the audit committee, encouraging open communication and collaboration on audit-related matters.
In summary, the CAE plays a critical role in educating the audit committee, which enhances the committee’s effectiveness and strengthens the overall governance and oversight framework within the organization.
Yes, the Chief Audit Executive (CAE) should play an active role in educating the audit committee, especially in areas that are critical to the effectiveness of the internal audit function and the overall governance process. Here are some key reasons why the CAE should engage in this educational role:
Understanding Internal Audit’s Role: The audit committee may not always be familiar with the full scope of internal audit's responsibilities and capabilities. The CAE can help the committee understand how internal audit aligns with the organization's goals, manages risks, and provides independent assurance.
Clarifying Internal Audit Standards: Internal audit operates under professional standards (e.g., the Institute of Internal Auditors' (IIA) International Standards for the Professional Practice of Internal Auditing). The CAE can educate the audit committee on these standards to ensure they understand the framework within which internal audit functions and the importance of compliance with these standards.
Risk Management and Audit Methodology: The CAE can educate the audit committee on the organization’s risk management framework, how internal audit supports it, and the methodologies used in audits. This can enhance the committee’s ability to make informed decisions about risk priorities, audit scope, and resource allocation.
Yes, the CAE should educate the audit committee. This helps the committee understand the role and value of internal audit, aligns expectations, and ensures effective oversight. By informing the committee about emerging risks, regulatory changes, and the importance of audit independence, the CAE fosters better decision-making and stronger governance. This education also enhances communication and collaboration, allowing the internal audit function to operate effectively and support the organization’s objectives while maintaining its independence and objectivity.
I dont know what is this
I do not work in the area of administration, but I suppose the Chief Audit Executive (CAE) has the responsibility to ensure the audit committee fully understands the risks, methodologies, and audit practices. However, I am sure that good communication and training are key for the committee to effectively perform its role
