How do you measure and report on the value and impact of audit and assurance activities to the board?

Measuring and reporting on the value and impact of audit and assurance activities to the board starts with clearly defining the value proposition of these functions. Articulate how audit and assurance activities contribute to the organization by enhancing risk management, improving operational efficiency, and ensuring compliance with laws and regulations. This definition should align with the strategic goals of the organization, demonstrating how audit initiatives help safeguard assets, optimize financial performance, and maintain the organization's reputation. By quantifying these benefits, such as reduced risk exposures or financial savings from improved processes, you can provide concrete evidence of the audit's value to the board.

?? Additionally, consider involving key stakeholders in the process of defining the value proposition to ensure alignment with their needs and perspectives. Collaborate with senior management, audit committee members, and other relevant parties to gather insights and feedback on what they consider valuable in terms of audit and assurance activities. This collaborative approach can enhance buy-in and support for the value proposition across the organization, fostering a culture of transparency and accountability. Moreover, regularly review and refine the value proposition based on evolving organizational priorities, regulatory requirements, and industry trends to ensure its continued relevance and effectiveness.

It's very important to figure out what makes your organization valuable before judging how audit and assurance activities affect it. You need to know what value means to your organization and board, like following rules, improving things, or changing for the better. It's important to match your audit goals and how you do things with what the board wants and the challenges they face. You also need to make a clear and steady statement about how audit and assurance activities help your organization reach its goals and stay true to its beliefs. By doing this, you can ensure your audit and assurance efforts help your organization succeed. Figure out and fine-tune your value statement to make sure it lines up with what you want to achieve.

To measure and report the value and impact of audit and assurance activities, first define what value means for your organization and board. Value can be viewed through lenses like compliance, assurance, improvement, innovation, or transformation. Align your audit objectives, scope, and methodology with the board's expectations, priorities, and challenges. Establish a clear value proposition that demonstrates how audit and assurance activities support the organization's mission, vision, and values, ensuring alignment and impactful reporting.

After defining the value proposition, select appropriate metrics to measure and demonstrate the impact of audit and assurance activities. Metrics can be quantitative, like cost savings, revenue generation, risk reduction, efficiency gains, or compliance rates, or qualitative, such as feedback, testimonials, ratings, or recognition from stakeholders. Choose metrics that are relevant, reliable, valid, and comparable, ensuring they accurately reflect the value proposition and provide clear insights into the effectiveness and impact of your audit and assurance efforts.

?? Consider integrating key performance indicators (KPIs) into each dimension of the balanced scorecard to provide specific metrics for measuring audit and assurance effectiveness. Additionally, regularly reviewing and updating the balanced scorecard ensures its relevance and alignment with organizational priorities. Collaborating with stakeholders from various departments can enhance the credibility and usefulness of the balanced scorecard by incorporating diverse perspectives and insights into the evaluation process.

How best can this be translated into objectives and key results considering that businesses are moving away from balanced scorecards?

?? In addition to metrics, a compelling narrative around audit and assurance activities humanizes the data, making it more relatable and impactful for the board. By weaving together real-life examples and anecdotes, you can illustrate how these activities have directly influenced the organization's success, addressing challenges and seizing opportunities along the way. This approach not only engages the board on an emotional level but also underscores the expertise and dedication of the audit and assurance team, ultimately reinforcing their credibility and the importance of their work.

While metrics and scorecards are essential, they alone cannot fully convey the value and impact of audit and assurance activities to the board. Complement them with a compelling narrative that illustrates how these activities have positively influenced the organization and its stakeholders. Highlight key achievements, challenges, opportunities, and recommendations, connecting with the board's emotions, interests, and concerns. A well-crafted story showcases the audit team's expertise, professionalism, and credibility, making the impact of their work more relatable and memorable.

?? In addition to soliciting feedback and following up, it's essential to create a structured feedback loop to ensure continuous improvement in audit and assurance processes. This loop involves actively listening to the board's suggestions and concerns, incorporating their feedback into future activities, and communicating the actions taken based on their input. Furthermore, regular check-ins and progress updates help maintain accountability and transparency, fostering a collaborative environment between the audit and assurance function and the board. This iterative approach not only enhances the effectiveness of audit and assurance activities but also strengthens trust and confidence in the process.