Audit committees aren't always getting the data and information they are looking for
In this podcast, Joseph McCafferty, head of audit content at the MIS Training Institute, talks with Blythe McGarvie, an author, speaker and director on several corporate boards. She is also chair of the audit committee at Viacom.
According to McGarvie, there is some truth to reports that show a gap between the information internal audit departments are providing and what audit committees are looking for. She says that while most internal audit executives provide accurate and useful information, it can always be better. She says the audit committee is looking for more information on the potential underlying problems that can cause specific incidents.
“There is a gap and it behooves the chief audit executive as well as the chair of the audit committee to have dialogue to try to close that gap. You don’t want one person thinking he or she is doing a great job and that the message is being ignored, so there is some work to be done on both sides,” says McGarvie.
She also says audit committees want to know more about how problems are identified. "I like to hear how did you or your team member discover the problem. Was it a whistleblower? Was it the fact that a customer complained? Did you notice in your regular audit that something looked funny so you dug a little deeper?" says McGarvie "The How of how did you uncover the problem is so important." She says that allows the audit committee to make a better determination if the problem is an isolated incident or could be recurring or pointing to bigger issues.
According to McGarvie, there is always room for better communication between audit committees and internal audit. To that end, she says she usually has a half-hour call with the chief audit executive before an audit committee meeting to make sure she understands all the issues. "I learned very early that my job as audit chair was to ask better questions. The audit chair is just trying to understand issues. If there is smoke, will there be fire? Or did you put out the fire?" she says.
To hear McGarvie on what audit committees are looking for and how they can communicate better with internal audit departments, click on the link below.
Length: 15 min. 35 sec.
size: 11.5 MB