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Managing the relationship between internal audit, external audit and the board

This presentation explores the dynamics between internal audit, external audit, and the board. Discover key issues, ideal positions, global trends, and practical suggestions offered by industry expert Eric Kimani. Gain insights into what a successful audit relationship looks like and how to enhance collaboration for organizational success.

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Managing the relationship between internal audit, external audit and the board

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  1. Managing the relationship between internal audit, external audit and the board A Presentation to ICPAK Annual Internal Audit Seminar 2016 by FCPA(K) Eric Kimani, MBS Eric Kimani@Harvestconsulting

  2. CREDIBILITY STATEMENT • 25 years Boardroom experience • Ex –CEO KTDA/Sameer, Finance Director, Internal Auditor • Chair, Various Board Audit Committees, • FCPA(K), CPS(K), LLB (Laws), Advocate Eric Kimani@Harvestconsulting

  3. PRESENTATION OUTLINE • Define the relationships • The key issues • What is the ideal position • Practical suggestions/Global trends • Summary & Call to Action Eric Kimani@Harvestconsulting

  4. The Relationship Defined • Distinct roles defined/ explained • Complimentary roles explained • Board Audit Comm. = affirming role • Internal= Assurance • External= Audit opinion • Where is the nexus of Roles? Eric Kimani@Harvestconsulting

  5. The Relationship Defined (Cont.) • Board Audit-Manage relationship • Supporting role of BAC-Oversight • Referee vs. External, Management • Ensure common value to entity • Affirm Internal Audit role • Ensure independence Eric Kimani@Harvestconsulting

  6. The Key Issues • We do not report to you • Your work is not exhaustive • We know better • We add value to business • We have the force of the law Eric Kimani@Harvestconsulting

  7. The Key Issues (Cont.) • You can rely on my work • We relied and failed • You are part of management • You don’t have enough evidence • You did not consult enough Eric Kimani@Harvestconsulting

  8. Global Trends • Emphasis on cooperation • Emphasis on separation of roles • Quality assurance • Training • Continuous communication Eric Kimani@Harvestconsulting

  9. Practical Case Study • The practice at XYZ Co. • Length of meeting • Frequency (4+2) • Content/Salary content • Follow up/ARP’s Eric Kimani@Harvestconsulting

  10. What Does a Successful relationship look like? • Mutually affirming • Mutual respect • Complimentary • Value adding • Issue-based Eric Kimani@Harvestconsulting

  11. Summary • IA should ideally sit in BRC, etc. • Power vested in BAC must be final • BAC may call for external help or more info • IAIA –Independent assessment recommended every 5 years. Preferably not EA. Eric Kimani@Harvestconsulting

  12. Call to Action • Let it be a love, love relationship that is mutually affirming. • Share info but stay independent. • The truth shall set you free- be fair and just Eric Kimani@Harvestconsulting

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