Basics: The Collaborative Approach

In this changed role, internal auditors must maintain their independence, while also being actively involved with business units. They can achieve this by adopting a positive, collaborative approach that enhances the value of internal auditing.

Start Evolving

Internal audit’s past role in ensuring compliance and detecting violations, although important, sometimes contributed to tension between auditors and management. Audit clients often regarded auditors as purveyors of bad news, leading to resistance and a lack of respect.

However, as companies become increasingly complex, there is an opportunity for auditors and clients to have a more collaborative relationship. Modern organizations face a wide range of risks, from technology threats to shifting regulations. Organizations need the internal audit function to help them face these challenges head-on, including identifying ways to enhance processes.

Adopt a Collaborative Mindset

A collaborative mindset is essential for building a strong relationship with management. Developing a partnership with clients can transform audit functionality in two ways:

1. Establishing Trust. When auditors are focused on supporting and enhancing the organization, they can build credibility with management. Trust between both parties can foster effective communication and collaboration by encouraging openness and transparency. A collaborative mindset can stimulate free-flowing discussions between auditors and management, enabling practitioners to align their work with the organization’s strategic objectives.

When management views auditors as collaborators, it may be more willing to share information that allows for a more in-depth and valuable audit. Also, management is more likely to implement audit recommendations.

2. Driving Change. Internal auditors should communicate their findings constructively to increase the likelihood that management will apply their recommendations. This approach allows internal audit to contribute to a culture of constant improvement within the organization.

For example, internal auditors can ensure processes remain optimized and aligned with organizational goals by identifying inefficiencies, collaborating with management to implement solutions, recommending standardization and best practices, and providing periodic reviews and ongoing support.

Join the Team

Although independence is one of the foundations of internal auditing, practitioners should be active members of the organization. Internal auditors who are integrated within the organization benefit from a much deeper understanding of its operations, culture, and challenges. Moreover, they are better positioned to detect threats and identify opportunities — a valuable ability in a fast-moving world of emerging risks.

This knowledge can enable them to provide more relevant insights and recommendations. And, management is more likely to trust internal auditors who are part of the team.

A Balancing Act

When establishing relationships with management and other stakeholders, internal audit functions must maintain their independence and objectivity. Auditors can balance their independence with collaboration by:

Reporting directly to the audit committee or the full board. For daily guidance, the CAE can report administratively to a member of senior management, ideally the CEO.

Defining the limits of their collaboration. While internal audit works closely with senior management to provide insight, executives should avoid becoming overly involved in operational or decision-making processes. This ensures the internal audit function remains objective.

Performing routine independence reviews. Regularly reviewing the audit function’s independence can help CAEs detect conflicts of interest and ensure auditors remain objective.

Having open communication. Auditors should be transparent in explaining the reasoning behind their findings and recommendations. This openness can build trust and ensure all stakeholders understand the value of the audit.

Collaboration Is Key

As internal audit’s role evolves, a collaborative approach is key to its success. Auditors should be strategic advisors who help navigate complex issues and drive great business decisions. Auditors who have a collaborative mindset can better support the organization’s long-term success.