To whom should your audit team report?

This is one of those perennial questions: Should a company's internal audit team report to the board audit committee or should it report to senior management? There are indications that more than a few companies are confused on the issue. One recent survey of banks about that while 40 percent note that their internal teams report to the audit committee chair, even more--nearly 60 percent--say they also report to senior management. While most would agree that "best practices" dictate that the internal audit function be controlled by the board, it's not so easy in reality. The fact is that internal audit teams certainly benefit by having the support of senior managers. How else are they going to push through reforms? At the same time, internal auditors may feel a bit intimidate knowing that they had to report their findings to executives. There's a whiff of impropriety about it that some may find unsettling. So, companies may want to set some boundaries and guidelines. Ideally you would want both the clout of top executives on your side and the security of reporting directly to the audit committee. Not easy.

For more:
- check out the survey results