So this week I’ve been through the process that all CAEs suffer for their whole lives, the production of audit committee papers. I do wonder whether the production of audit committee papers ever becomes less aversive? For it does not matter how prepared I am, how much I warn, cajole and direct my teams, nor signal to managers and auditees the deadline and timeline, the production of audit committee papers always seems traumatic.
I suspect that this is due as much to my perception as reality. As a CAE I have often felt that the audit committee is all about the CAE. It is the moment when the CAE is really held to account. For no matter how many other people contribute papers, or the fact that there are many other agenda papers other than internal audit’s, or that management are to be held to account too, or that a secretariat function is meant to be making the meeting a success, the reality is that it is internal audit’s show. It is internal audit that produces the majority of the interesting papers. It is internal audit that really sets the agenda on behalf of those once-removed from the organisation, non executives. It is not management’s primary responsibility or interest to service an audit committee.
I have been really lucky in my career to work with some great chairs of audit committee. Most have been generous in time and spirit, bright, supportive and challenging, held me to account but listened to my views. Yet despite all of this, I cannot help thinking the most stressed, paid to make it work, held accountable individual in the audit committee meeting, is the CAE.
This goes for the internal audit team too. I have always had a policy to bring my audit deputies and managers to the audit committee. Why? It is to enable them to feel the sting of accountability when a good paper is not presented well or received well, or when a piece of work is not good enough and is unpicked. Audit teams never seem to stress, because they ultimately are not held to account at that meeting. That burden always falls squarely on the CAE. For it would be a bad CAE that started to pass blame for poor or weak work onto junior members of staff.
It is this moment, this crux (or many cruxes) in each year that makes CAEs become picky, obsessive and OCD about audit quality outputs throughout the rest of it. For if something is even slightly wrong, or a little bad, audit committee members will pick up on it.
I wonder if, in this, the experience for CEOs is similar? When they account to their shareholders, the board, or the governing body, do they feel the same? That same sense of ultimate accountability, or accountable stress, for all items presented? I suspect so. Yet I have seen a much more understanding board for CEOs (they can’t control everything can they?) than audit committee for CAEs. I reckon this is because non executive lay members are in ‘accountability mode’ when they attend these meetings, not sanguine understanding and context-understanding mode.
So do I ever foresee a period leading up to an audit committee without stress or a meeting without any tension for me as CAE? No, not really. Will I continue to at least try to share it with my team? Yes, of course!