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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.
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
Yes, the Chief Audit Executive (CAE) should educate the audit committee. It is part of the CAE's responsibility to ensure that the audit committee understands its role, the internal audit function, and key governance, risk, and control issues. This includes:
Educating the audit committee strengthens its ability to provide oversight, support internal audit independence, and enhance organizational governance.
Educating the audit committee is crucial for the effectiveness of the internal audit function and the overall governance of the organization. By providing ongoing education and support, the CAE can help ensure that the audit committee fully understands its role, the audit process, key risks, and how internal audit contributes to the organization’s success. This leads to better decision-making, stronger oversight, and a more effective internal audit function.
Yes, the Chief Audit Executive (CAE) should take an active role in educating the audit committee. While it's ideal for audit committee members to possess strong knowledge of accounting, audit, and risk management, that’s often not the reality. As the CAE, educating the committee helps them make informed decisions, enhances their understanding of internal audit’s role, and strengthens their ability to provide oversight.
By sharing relevant articles, news, and developments in areas like corporate governance and risk management, the CAE helps the committee stay current and effective in their responsibilities. Tools like quizzes or regular updates can foster engagement, build a stronger relationship, and ensure alignment between the internal audit function and the committee.
It is obliged by "corporate governance" that Board of Directors and members of audit community must have continuos education and laws updates and related matters.
But is it CAE role to do that?!
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.
