FEI Research Foundation Products available for this topic are:

• Audit Committee Trends & Tools: A Time for Change, May 2002
• Audit Committees and Financial Literacy-Three Steps to Meet Higher Standards, March 2002
• Internal Audit and Innovation, January 1995

According to the Institute for Internal Auditors (IIA), internal audit should report functionally to the Audit Committee and administratively to the CFO. The reason is quite simple: There could be an independence problem if internal audit is reviewing a function or procedure for which the CFO is responsible. Under the Sarbanes-Oxley Act of 2002, the CFO is responsible for the design of control systems. For further information on the reporting structure for the internal audit function, visit the IIA website.