An internal audit charter forms one of the most important documents in an internal audit department. An internal audit charter creates awareness about the internal audit function and its role within an organization. An internal audit charter acts as a formal authority document for the internal audit department to execute its work. At a recent visit to one of our client's I met their chief audit executive i.e their head of internal audit department. Sarah the CAE discussed how internal audit had played a major role Sarbanes Oxley and compliance with Sections 302 and Section 404. Out of curiosity, I asked Sarah, "Post Sarbanes Oxley, have you made any changes to the internal audit charter?". Her answer to my question cleared a lot of my doubts as to how an intenral audit department can help in Sarbanes oxley compliance.

Sarah explained that post sarbanes oxley, they had a relook at their IA Charter. Even though the existing charter was approved by the chief executive officer CEO, Sarah felt it imperative to change it so as to incorporate the role of the internal audit department with respect to complying with Section 404 and 302 of the Sarbanes Oxley act. A revised internal audit charter creates an awareness within the organization of the role of internal audit. An updated intenal audit charter enables a CAE to ensure that stakeholder expectations and value drivers are met. Even the audit committee can use this updated IA charter to measure how effectively the internal audit department is performing its duties.

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