The Internal Audit Charter as a Strategic Engine

Principle 6 also provides key considerations for effective implementation of the audit charter. When leveraged appropriately, these considerations can transform the internal audit charter into:

• A strong, strategic asset that reinforces internal audit’s position and ensures it has a meaningful voice at the decision-making table.
• A valuable tool for educating the board and senior management on purpose, scope, and expectations of the internal audit function.
• A strong enabler for building and strengthening relationships and partnerships throughout the organization.

These three important objectives are not always easy to achieve, as all require effective communication skills and the ability to turn what may seem straightforward into a strategic opportunity that elevates the internal audit function. This becomes even more critical in environments where internal audit is perceived as a mere compliance function, rather than recognizing its broader value in governance, risk management, and organizational performance.

CAEs must be able to articulate their mandate in a way that resonates with diverse stakeholders, translating technical requirements into language that aligns with organizational priorities. This skill is especially relevant when the board has limited knowledge of the internal audit function and its contribution to the organization’s governance and performance.

CAEs can begin with the “why,” emphasizing how internal audit strengthens decision-making. They should then connect their mandate to key organizational priorities such as growth, resilience, and efficiency.

CAEs should focus their message on each stakeholder group. They need to understand each group’s objectives and clearly link internal audit’s work to their success.

It is important to be clear and concise. CAEs should avoid technical language and jargon that may create barriers to understanding. They can use real-life examples that resonate with stakeholders, showing, for example, internal audit support to strategic initiatives, cost optimization, digital transformation, sustainability commitments, regulatory compliance, and other priorities.

Implementation of the charter should create a dialogue. This should be an opportunity to build relationships and create partnerships. CAEs should be prepared to answer questions and discuss concerns. They should be open and invite feedback on how internal audit can support priorities. Approaching the conversation defensively can shut down dialogue and limit the opportunity to create value.

Finally, CAEs should follow up and show stakeholders how their input has been incorporated into the charter, reinforcing transparency and partnership.

Engaging with a board that is not fully familiar with internal audit’s contributions, or a newly appointed board, can be challenging even for seasoned CAEs. However, demonstrating, through concrete, industry-relevant examples, how internal audit supports the board’s core responsibilities in areas such as governance oversight, risk management, and internal controls can help build a strong relationship and position internal audit as a strategic asset.

A successful drafting process allows the internal audit charter to become not just a formal document, but also a powerful instrument to shape expectations, influence governance conversations, and reinforce the value the function brings to the organization.