Independence and objectivity are hallmarks of great internal audit functions and the professional men and women who lead them. Against this backdrop, the prevailing model for the profession mandates the establishment of separate functional and administrative reporting lines that foster that independence and impartiality.
From my experience, heads of audit are less likely to be unduly influenced by management when they have a strong functional reporting relationship to the board or audit committee. Without such a relationship, it is very easy for management to confine the scope of internal audit’s work and to suppress any unfavorable results.
Recent data from the 2015 Common Body of Knowledge Global (CBOK) Practitioners Survey offers encouraging news about the progress being made along this front, with more than 70 percent of respondents having a functional reporting line to an audit committee or the board of directors.…