The CAEs’ skills and responsibilities and their views on the internal audit charter

Abstract

Purpose: The aim of this study was to ascertain the necessary skills and responsibilities of Chief Audit Executives. As one of the most important duties of a Chief Audit Executive is to prepare and maintain the internal audit charter, the study also intended to determine Chief Audit Executives’ perception of the internal audit charter and its contents. Design: Virtual semi-structured interviews were carried out with Chief Audit Executives of Maltese listed entities. The aim of these interviews was to obtain an in-depth understanding of the skills which these Chief Audit Executives deem necessary to be an effective and successful as well as their responsibilities. The interviews also explored the contents of the internal audit charter section by section in order to obtain a specific opinion about each respective content. Findings: The results obtained from the interviews carried out indicate great importance being given to the soft skills which Chief Audit Executives must possess in order to establish positive relationships with all stakeholders of the internal audit function. Furthermore, the responsibilities that Chief Audit Executives are changing due to an unprecedented evolution which internal audit functions face. To keep up with this change, Chief Audit Executives identify two key resources necessary to adapt, mainly human resources and technology. The responsibilities which Chief Audit Executives are charged with also tend to vary from organisation to organisation, depending on its nature and whether it is operating within a regulated market or not. With regards to the internal audit charter, the Chief Audit Executives interviewed showed an extremely positive sentiment towards the internal audit charter and its contents, often highlighting the relative importance of each respective area within the charter. Conclusion: Chief Audit Executives are well aware of the constant state of evolution which the internal audit function constantly faces and the pressures this puts on them to maintain optimal audit quality regardless of the changes they face. A key document which aids Chief Audit Executives in keeping up with this evolution is the internal audit charter, where its importance to the internal audit function cannot be understated and where Chief Audit Executives must constantly revise this document in order for it to remain relevant. Implications: It is expected that this study will provide readers with a better understanding of the skills Chief Audit Executives must possess as well as the responsibilities which they are charged with. This study also aims to highlight the importance and relevance of the internal audit charter.