Hiring and inspiring a chief audit executive
by Larry E. Rittenberg and Richard J. Anderson
Many companies are raising the expectations for their chief audit executives (CAEs) to include operating at more strategic levels of risk management and corporate governance. Successful CAEs must partner effectively with the audit committee and other members of the senior management team to achieve their objectives.
To be effective, CAEs need to demonstrate a solid understanding of the company’s business, core strategies, risk appetite and risk tolerance. CAEs must be willing to raise difficult issues with senior management and the audit committee - even if such actions prove unpopular.
The CAE should maintain an ongoing dialogue with the audit committee. This will build a relationship and help the committee stay on top of significant risk and control issues.
One of the chief attributes of an effective CAE is the ability to attract and develop talent and build a high-quality staff. In many organizations internal audit is a source of management talent for other departments.
Reprinted with permission from
Journal of Accountancy, July 2006.
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