Building a Better Auditor: A Strong Board Relationship
Blogs Hassan Khayal, DBA, CIA, CRMA, CFE Aug 11, 2025

Internal audit is essential for companies to maintain good governance systems, control risks properly, and guarantee compliance with relevant laws and rules. Keeping that in mind, one of the most important relationships internal audit has is with the board or equivalent governing body.
Although internal audit and the board have separate duties, their cooperation is vital to guarantee that a company runs effectively. In fact, internal audit’s role extends beyond being a compliance requirement; it serves as an early warning system for the board by identifying potential weaknesses or threats that could harm the organization. Ideally, internal audit should also recommend how to use the organization’s strengths and opportunities to best optimize operations. Using this specific terminology (strengths, weaknesses, opportunities, and threats) makes it easy to see how internal audit is a strategic function that helps support an organization’s SWOT analysis. These insights from internal audit allow the board to make more informed strategic decisions and fulfill its oversight responsibilities more effectively, firmly establishing internal audit as a strategic advisor.
With that in mind, here are my top four reasons a healthy relationship between the board and internal audit is extremely important.
Providing an Independent Perspective
Internal audit typically reports directly to the board or an audit committee that represents it, ensuring that its assessments are not unduly influenced by management and ensuring the board has access to independent insights into the organization’s risks. This relationship is a key foundation to the tenets that enable internal audit to perform its expected duties effectively.
Even though executive management is largely in charge of managing the organization's daily operations, they are subject to challenges caused by agency theory, a management and economics theory that focuses on the potential conflicts of interest that arise when the agent is expected to act in the best interests of the principal but may instead act in their own self-interest. Agency theory emphasizes the need for oversight, incentives, and controls, like internal audits, to align the agent’s actions with the principal’s goals.
Therefore, it is part of the board’s job to make sure that management is operating in the best interests of stakeholders and shareholders. Making wise governance decisions requires the board to have access to unbiased assessments, free from the influence of senior management. Internal audit provides that unbiased viewpoint with an objective assessment of the organization's operational governance, major risks, and controls environment.
Improving Governance and Transparency
Making sure the business complies with the strictest corporate governance guidelines is one of the board's main duties. By assessing the current governance procedures and pinpointing areas for governance improvement, internal audit assists the board in carrying out this duty. This entails assessing the organization's ethical culture, the efficacy and sufficiency of internal controls, and adherence to internal and external regulations.
Internal audit enhances the organization's overall transparency and promotes accountability at all levels by regularly informing the board of the state of governance procedures and control frameworks.
To me, the single most important assurance activity internal audit can perform is over the ethical culture of the organization, as ethics are the root of all observations that internal audit makes.
Fostering Accountability
Internal audit fosters accountability within the company through its relationship with the board. For instance, when examining whether senior management has complied with policies, procedures, and regulations, internal audit is essential. The board can take corrective action after internal audit reports any areas of non-compliance or inefficiency.
By holding senior management accountable for their actions and informing the board of any areas that need attention, this system of checks and balances fosters an accountable culture.
Supporting Strategic Decision-Making
Internal audit can help the board make strategic decisions in addition to offering assurance on operational risks.
For example, internal audit may spot new risks like market fluctuations, legislative changes, or cybersecurity threats that could have an impact on the business' long-term plans. Internal audit helps the board adapt its strategy or governance structures to changing conditions by identifying these risks early. The company maintains its agility and is better positioned for future success, thanks to this proactive approach.
So, how does the relationship between internal audit and the board work?
An audit committee, a subset of the board, is usually used to structure the relationship between internal audit and the board. Typically, the audit committee is responsible for supporting the internal audit function and making sure it runs smoothly and independently. This relationship thrives through:
- Regular communication and reporting, usually at least quarterly.
- Cooperation on input into the risk management process.
- Creation and implementation of the audit plan, which delineates the audit focus areas, based on the organization's risk profile.
- Regular feedback and recommendations following audit completion.
An organization's overall success depends on the board and internal audit having a solid working relationship. Effective cooperation between internal audit and the board can foster a culture of openness, responsibility, and ongoing development, all of which are essential components of sustained organizational success.
The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of The Institute of Internal Auditors (The IIA). The IIA does not guarantee the accuracy or originality of the content, nor should it be considered professional advice or authoritative guidance. The content is provided for informational purposes only.