In today’s complex business landscape, internal audit is expected to be far more than a compliance checkpoint. Organisations increasingly look to internal audit for insights, foresight, and assurance that strategic risks are being managed effectively. At the centre of this value delivery stands the Chief Audit Executive (CAE), who must balance independence with influence, and objectivity with collaboration. One of the most critical aspects of audit leadership is the ability to build, nurture, and manage strong stakeholder relationships—while steadfastly preserving independence and objectivity. Achieving this balance is both an art and a discipline.

The Strategic Role of Stakeholder Relationships

Internal audit interacts with nearly every corner of the organisation. The CAE engages with a diverse set of stakeholders, including the board, audit committee, C-suite leaders, compliance officers, and operational heads. Each brings different expectations, priorities, and pressures. By cultivating meaningful relationships, the CAE gains a clearer picture of organisational dynamics, emerging risks, and areas that require proactive attention.

Effective relationship management ensures that internal audit is aligned with the organisation’s strategic direction without compromising its mandate. When stakeholders feel heard and understood, they become more willing to share information openly and seek audit’s advice voluntarily. This creates a collaborative environment where risks can be identified earlier, control weaknesses can be addressed more efficiently, and audits become more targeted and impactful.

Strong relationships also create a foundation of trust. When business leaders trust the CAE, they are more open to sharing information, discussing sensitive issues, and seeking audit’s perspective proactively rather than defensively. This trust accelerates issue resolution and fosters a culture of transparency —essential ingredients for good governance.

Human Connection: A Critical Leadership Skill

Technical expertise alone does not make a CAE successful. The ability to connect with people—emotionally, intellectually, and professionally—is equally vital. Senior management operates under constant pressure, managing investor expectations, regulatory responsibilities, and operational challenges. A CAE who communicates with empathy and clarity is better positioned to influence, advise, and guide.

Human connection plays an especially important role during challenging conversations. Audit findings sometimes highlight difficult truths or require changes that may be uncomfortable for business leaders. If the CAE has strong personal rapport and credibility, these discussions shift from defensiveness to collaboration. Instead of perceiving audits as fault-finding exercises, stakeholders begin to view them as opportunities for improvement.

Beyond formal interactions, informal conversations and day-to-day engagement often reveal insights that are not captured in dashboards or reports. These subtle cues help the CAE anticipate cultural challenges, brewing risks, or resistance to change. Such awareness strengthens audit planning and enhances the relevance of audit recommendations

The Importance of Maintaining Objectivity and Independence

While relationships and human connection are essential, they can never overshadow the core principles of internal audit—objectivity and independence. These principles form the bedrock of audit credibility.

Independence ensures that the CAE has the freedom to evaluate processes and decisions without undue influence. This structural support, often reinforced through a direct reporting line to the audit committee, empowers the CAE to escalate issues even when they challenge the prevailing narrative.

Objectivity is the personal discipline of approaching each audit with a neutral, evidence-based mindset. It requires auditors—and particularly the CAE—to remain vigilant against biases that may arise from long-standing relationships, organisational politics, or personal sympathies.

The true challenge lies in managing the delicate balance between closeness and neutrality. A CAE who is too detached risks becoming irrelevant; one who is overly embedded may lose impartiality. The most effective audit leaders maintain this balance through:

• Clear professional boundaries
• Transparent communication with stakeholders
• Consistency in applying audit standards
• Regular engagement with the audit committee
• Documented and defensible decision-making

When stakeholders trust that audit insights are objective and unbiased, they are more willing to act on recommendations—even when the message is uncomfortable.

Strengthening Governance Through Trust and Transparency

Maintaining independence does not weaken relationships; in fact, it strengthens them. Senior leaders value honest, unfiltered insights—especially when navigating periods of uncertainty or transformation. A CAE who can deliver difficult messages with tact, empathy, and factual clarity becomes a trusted advisor.

Trust is also built when the CAE demonstrates transparency—not just in reporting findings, but in explaining audit rationale, methodology, and the reasoning behind risk assessments. When stakeholders understand how conclusions were reached, they are more likely to support corrective actions.

A Continuous Leadership Journey

Managing stakeholder relationships is not a one-time effort but an ongoing leadership journey. Regular engagement, constructive feedback loops, and a genuine interest in organisational priorities help the CAE evolve from a functional leader to a strategic influencer. As organisations evolve, so do risk profiles, leadership expectations, and cultural dynamics. A strong CAE keeps pace by regularly recalibrating relationships, strengthening communication, and revisiting the balance between partnership and independence.

By blending technical rigour with human connection—and upholding unwavering objectivity and independence—the CAE transforms internal audit into a strategic function that supports resilience, transparency, and long-term organisational success.

In essence, the CAE’s ability to blend technical rigour with human connection ultimately determines whether internal audit is perceived as a value-adding partner capable of shaping better decisions—and stronger organisations.

 

About the author:

 

Amit Sharma is the Vice President and Head of Audit – APAC at EXL, with over 24 years of experience in internal audits, risk management and compliance. As part of his commitment of giving back to the auditing profession, he also serves on the IIA India Delhi Branch Board of Governors and is the Chairperson of the Publications & Research committee of IIA India Delhi Branch.