…an audit committee chairman observed that ratings can “shine a light” and help the audit committee quickly focus on the most important findings in a report. However, while ratings may be a “light” for some, they are ultimately a “lightning rod” for others.

Ratings can be a powerful tool, but if management and the audit committee place undue emphasis on them, they tend to have a polarizing effect on line and operating managers whose performance ends up being summarized in a single word: “unsatisfactory.”

Even the most useful tools have their limitations. In this post, IIA CEO Richard Chambers ponders the benefits and drawbacks of the use of ratings systems in internal audits. Read more here.