What is the appropriate relationship between the internal audit activity and the audit committee?
The audit committee of the board of directors and the internal auditors are interdependent and should be mutually accessible, with the internal auditors providing objective opinions, information, support, and education to the audit committee; and the audit committee providing validation and oversight to the internal auditors. The IIA recognizes that audit committees and internal auditors have interlocking goals. A strong working relationship is essential for each to fulfill its responsibilities to senior management, the greater board of directors, shareholders, and other stakeholders. Appropriate reporting lines for the internal auditors are critical if they are to achieve their requisite independence, objectivity, and organizational stature needed to effectively assess the organization’s internal control, risk management, and governance processes. Best practice recommends that, to achieve necessary independence, the internal auditor should report directly to the audit committee or its
