Internal Audit Dilemma: Should Control Staff Query Senior Employees During Investigations?

Can a staff of Internal Control or Internal Audit issue a query during an investigation to a senior staff member within the company? We recently had a case where many debated whether the Control staff could issue such a query or if they should have their boss handle it. The staff who issued the query is directly involved in the investigation and needs to obtain explanations from key individuals involved in the case.

It depends on the organizational work pattern. Queries from internal audits need to be addressed before they escalate into internal audit objections. The normal pattern is for audit staff to inspect and write preliminary queries, then provide them to the concerned office or department for clarification. If a query is satisfactorily answered, the matter ends there; otherwise, it is escalated to the Head of Department (HOD) for discussion with the Audit HOD. All these queries regarding who will sign and discuss need to be documented in the internal audit manual. Ego hassles should not intervene in such matters.

Authority of Internal Audit Staff

A staff member, by virtue of the power vested by the board to the Internal Control or Internal Audit team, can issue queries in the course of an investigation.

The position/grade of the staff has changed, and now they are considered an Auditor for Internal Audit for this specific purpose. The position of the staff is now "auditor," which is considered higher than all such grades in the company's hierarchy.

Consequences of Non-Cooperation

Non-cooperation in Internal Audit matters is itself a serious misconduct and a violation of guidelines issued by the board. Mr. Nath Rao's opinion is very specific in understanding the issue.