Interaction between internal audit and different organisational parties: An analysis of expectations and perceptions

This study, based on six case studies within a Belgian context, provides a qualitative assessment of the interaction between internal auditors and the audit committee as well as CEOs and CFOs by analysing their expectations and perceptions. It became clear that both groups have high expectations vis-à-vis the internal auditor(s), although the perceptions of the interactions are not universally positive. On the one hand, audit committee members want the internal auditor(s) to be(come) an important information provider. Therefore they expect the internal auditor(s) to demonstrate and communicate as much as possible their contribution to the monitoring and functioning of the organisation as well as to play a (pro)active role in risk management. It became clear that in most cases, due to a mismatch of interests, there is an under-emphasis on the internal audit oversight roles of the audit committee, which is more perceived by the internal auditors than by audit committee members. In order to reduce this mismatch, both parties should broaden their interests in a converging way completed with a clear communication about the mission and roles of internal audit. On the other hand, CEOs and CFOs want the internal auditor(s) to compensate their loss of control that results from an increased organisational complexity. CEOs and CFOs expect the internal auditor(s) to fulfil an active management supporting role with a strong focus on continuous improvement in risk management, internal controls, organisational processes and strategic important projects. Thereby, internal auditor(s) are expected to create a sufficient level of risk and control awareness within the organisation. Although the interaction with CEOs and CFOs is stronger than the interaction with audit committee members, we found that the expression of findings and suggestions in more quantitative terms and regular informal contacts can still improve this interaction.