Weekly Wrap – 21st August 2014

 

Hi I am Tom McLeod, Co-Founder of McLeod Governance.

This is what I would be thinking about this week.

In the last week, I have had two different clients approach me with regards to what makes a good Audit Committee report.  One question came from an Audit Committee Chair and the other from a Chief Audit Executive.

So today’s Weekly Wrap looks at the principles that I have always applied in the development of Audit Committee papers.

The Three S’s Approach

And for me it comes down to the three S’s.

Firstly S for Simple.

Secondly S for Succinct.

And thirdly S for Significant.

Simple Reporting

Let’s do Simple first.

Ronald Reagan’s speechwriter – a lady by the name of Peggy Noonan – used to have a phrase about how she constructed Reagan’s speeches.

It was tell them what you are going to tell them; tell them and tell them what you have just told them.

And in essence that is the principle that I apply when I am writing an Audit Committee paper.

Make sure that the reader fully understands the message that you are seeking to convey.

Succinct Reporting

Secondly is Succinct.

Too often I read, or review, Audit Committee papers that seem to value weight over quality.

A good Audit Committee paper does not necessarily need to be long.

A good Audit Committee paper can be succinct and can – and indeed should – use diagrams to replace words.

Significant Reporting

Thirdly is Significant – and this is the most important one.

Nothing that goes into the Audit Committee paper should be insignificant.  You have to ask yourself as to whether the Audit Committee really cares whether you are two days over in the delivery of a review.

If that is significant, report it.  If it isn’t, do not.

The great challenge that most of us confront when we are developing Audit Committee papers is determining what is significant – but ultimately that is the great value of a Chief Audit Executive.

 

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