Professional Documents
Culture Documents
INTERNALAUDITING::
AUDITING
AADDING
DDING VALUE ACROSS THEBBOARD
CROSS THE OARD
A look at the profession & corporate governance
.
.
.
.
.
.
A CHANGING WORLD
I NTERNAL AUDITING is an
independent, objective,
assurance and consulting
activity that adds value to and
improves an organization’s opera-
they review. They also monitor
organizational ethics.
11
IN PARTNERSHIP WITH MANAGEMENT
I NTERNAL AUDITORS’
diverse capabilities bring
tremendous value to the
board and the audit committee in
their corporate governance
— allowing them to target high-
impact areas, appropriately allo-
cate scarce resources, and be well
positioned to advise management
on vulnerabilities and corrective
responsibilities and risk manage- actions.
ment oversight. It is critical that
the chief audit executive (CAE), Implementing a risk-based
senior management, and the approach can uncover potential
audit committee have sufficient organizational risks that may other-
contact and communication to wise go undetected and provide
ensure that the parties under- management with a critical tool for
stand and accept their individual gauging and assessing enterprise-
and collective responsibilities for wide risk. This allows management
risk management. to allocate the greatest amount of
resources to the areas that will
Today’s audit committees must yield the highest return on invest-
deal with complex and diverse ment and ensures that the
issues and ever-increasing respon- organization has dedicated audit
sibilities. As a result of laws and coverage for high-risk areas.
regulations, such as the U.S.
Sarbanes-Oxley Act of 2002,
audit committees are being asked
to monitor such areas as: man-
agement’s assessment of internal
controls over financial reporting;
A its oversight responsibilities, the audit
S PART OF
committee should:
4
ADDING VALUE ACROSS THE BOARD
INTERNAL AUDITING:
INTERNAL AUDITING: ADDING
VALUE ACROSS THE BOARD
C OMPETITIVE PRESSURES
demand that today’s
organizations squeeze
the most they can from all their
resources — and as this brochure
indicates, the internal audit pro-
emerging technologies, detecting
and deterring fraud, analyzing the
effectiveness of policies and pro-
cedures, and identifying opportu-
nities to save you and your
shareholders money.
cess is clearly among the most
critical. In addition to their When it comes to adding value
responsibility for assessing and across the board, there’s no better
recommending internal controls, resource than internal auditing.
internal auditors’ skills in risk
management and their broad-
based perspective of the organi-
WORLD-CLASS INTERNAL AUDIT shops speak out
on the importance of their relationship with the audit
zation uniquely position them as committee:
a valuable resource for strong
Internal auditing is the primary resource of the
corporate governance.
audit committee in carrying out its duties and
responsibilities. With those responsibilities increasing
As a result, informed senior and continued pressure from the SEC for financial
managers and boards are relying reporting integrity, a functioning partnership of the
on internal auditors for advice and audit committee and internal auditing is vital.
counsel on everything from analy- – BellSouth Corporation
sis of operations and assessment Internal auditors should not have to report through
of risk to recommendations for layers upon layers of management as this could
improved corporate governance. compromise or dilute recommendations and their
Moreover, internal audit practi- effectiveness. Audit services’ relationship with the
tioners are increasingly being audit committee is critical and contributes to the
success of our company.
challenged to apply their expertise – Carolina Power & Light Company
in much broader ways than ever
before — such as evaluating Internal auditing’s relationship to the audit committee
is important to assure there are no organizational levels
below the board of directors that could prevent neces-
sary actions or appropriate decisions from taking place
or being made to enhance business opportunities and
mitigate risks.
– Asea Brown Boveri
9/05249 th/pd
Printed on recycled paper in the U.S.A.