Strengthening Administrative Reporting Relationships

Over the course of my career as a CAE, I’ve worked with nearly 15 chief financial officers across a wide range of organizations — public sector, private equity, professional services, and publicly traded companies. While my role evolved and the people I worked with changed, those experiences shaped a core belief that I still hold firmly today: The reporting relationship between the CAE and their executive sponsor is the single most important relationship in internal audit. Yet it’s one that is overlooked all too often.

A strong relationship with the executive line isn’t merely a nice-to-have. It defines a CAE’s ability to perform. After all, a relationship to the C-suite influences everything from the scope of work to access to strategic initiatives and organizationwide resources.

In a relationship built on trust and transparency, the C-suite can be a CAE’s biggest advocate, empowering internal audit leaders to fulfill their mandate and endowing them with the organizational clout and resources to excel. Trying to operate without that trust can become a significant obstacle to the CAE’s effectiveness and influence, as well as the long-term value of the internal audit function.

Pillars of a Strong Relationship

Administrative reporting relationships must be intentionally nurtured and sustained over time. The strongest and most effective relationships are the ones built on authenticity and a high degree of trust.

From a governance perspective, trust requires a sense of personal safety in the role — the understanding that when the CAE reports to his or her administrative line, they can do so freely and openly, even if the subject matter is personal or sensitive in nature. As any internal auditor knows, evaluating the effectiveness of someone else’s work can be delicate, and at times awkward. But the most effective and successful CAEs are ones who embrace these conversations openly and strive to foster relationships grounded in confidence and emotional security. 

Effective administrative reporting relationships are also inherently strategic. Every conversation with the administrative line should be approached with a clear vision for the direction of the function and the enterprise, including how internal audit can be best positioned to support the next phase of growth and transformation.

By engaging in a consistent dialogue around the organization’s strategic objectives, the CAE can gain broader visibility into enterprisewide performance — and more opportunities to share foresight and strategic insight.

Common Challenges

Misconceptions about internal audit and a general sense of apprehension toward the profession can erode trust and limit the CAE’s ability to build strong administrative reporting relationships.

Whether stated outright or implied, the common perception of internal audit as the company “watchdog” has been a persistent theme throughout my career. The antidote, in my view, is to focus on establishing personal connections and developing a deeper sense of shared values with the executive line. This is achieved through informal communication as much as through formal channels.   

In fact, as a CAE, my favorite time to strengthen working relationships is after 5 o’clock. The workday has wound down, meetings are finished, and it’s often the perfect moment for informal conversations about priorities and challenges with executive leaders. As simple as it sounds, these moments can be a powerful way to signal that I am part of the team and I am there to listen, support, and advise.

Beyond connection and alignment, consistently demonstrating the value-add of internal audit — and actively advocating for that value — is critical. As CAE, this means demonstrating that I am an effective anticipator of risk with a strong understanding of my industry and the competitive landscape. It also means staying closely aligned with strategic objectives and articulating my insights and work through that strategic lens.

My final piece of advice for strengthening reporting relationships: Nurture relationships with internal audit “friends” in the organization. These are the organizational units, many of them in the second line, that should be considered close allies and partners to internal audit — risk, compliance, and security, for example. Invest in these relationships and work to foster open, consistent communication. They are essential to gaining deeper insights into core operations and strategic objectives across the organization. You’ll need them just as much as they’ll need you.

Looking Ahead

We’re at a critical moment for internal audit, facing a rapidly shifting risk landscape and an ever-expanding scope of service. As practitioners and CAEs look to enhance performance and resilience, strengthening administrative reporting relationships is a powerful place to start. By prioritizing trust, authenticity, and strategic communication, CAEs can embed internal audit into the strategic fabric and long-term success of the organization.

Robert Kuling will be speaking at The IIA’s GAM: Great Audit Minds conference March 9-11 in Las Vegas. He will lead a session titled “The Art of Alignment: Mastering the Administrative Reporting Relationships.”