Informal Communication: A Path to Success for Internal Auditors

Abstract

The newly issued 2024 Global Internal Audit Standards recognize the need for informal communication for the first time, highlighting the vital role of informal communication in facilitating effective information flow and building relationships between internal auditors and their stakeholders. Frequent informal communication can significantly enhance the benefits of formal reporting by helping internal auditors gain deeper knowledge of the organizational culture and dynamics, nurture mutual understanding of internal audit work, and take a comprehensive perspective on risk. Drawing upon data gathered through interviews, surveys, and audit committee charters, we find that informal communication between internal auditors and the audit committee plays a pivotal role in obtaining audit committee support and building strong relationships. However, there is a significant gap between current practice and the new guidance for informal communication. We discuss implications of the new standards and offer suggestions to improve informal communication.