Page 22 - IAT_April_2025_Magazine

Balancing Compliance and Business
Pressures: Can Auditors Say No?
Swapnesh Bansal
Chairperson of Ethics Committee & Chief
Financial Officer-Iron Ore Business, Vedanta
Limited
swapnesh.bansal@vedanta.co.in
As a business leader, I’ve come to appreciate
that governance and growth are not opposing
forces, they are two sides of the same coin. An
organization thrives not just because it moves fast,
but because it moves in the right direction, with
integrity and control. And that is where audit plays
a crucial role.
In any corporate setting, the relationship between
business and audit can be complex. There is often
a tension between the need for strong governance
and the agility required for business growth. On
one hand, companies need agility, speed, and
innovation. On the other, governance, compliance,
and risk management are non-negotiable. The
challenge is finding the right balance where audits
don’t become an obstacle, but rather a strategic
function that enables growth while upholding
ethical standards.
At Vedanta, we believe that an audit should not
be a rigid checkpoint that slows down business;
it should be a guiding force that helps the
company navigate risks without compromising
opportunities. But how do we create this balance?
How do we ensure that internal audits strengthen
business operations rather than restrict them?
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The Business Perspective: Running a
Company in a Complex World
As a CFO, I operate in a world where speed,
efficiency, and adaptability are crucial for survival.
We are responsible for delivering results, navigating
uncertainties and making tough calls. Financial
decisions must be swift and strategic, balancing
risk and reward while navigating an ever-evolving
regulatory landscape.
In such an environment, if audits are too rigid,
they can create bottlenecks, slow decision-making,
and sometimes even lead to missed opportunities.
For example, a compliance-heavy approval process
might delay a strategic investment.
This is not to say that businesses do not value
audits. On the contrary, they expect audits to be
practical, forward-thinking, and aligned with
business realities. A strong audit function should
not just point out issues, it should offer solutions
that are both compliant and commercially viable.
The Auditor’s Perspective: Governance Is
Not Just a Formality
On the other side, auditors operate under immense
scrutiny. With increasing regulatory oversight and
heightened public scrutiny, the role of auditors has
evolved significantly. Today, an audit is no longer
just about completing a checklist—it is about
providing real assurance that internal controls are
effective and risks are well managed.
However, for audits to be truly effective, they
must also be pragmatic. Auditors should not take
such a rigid stance that they become a roadblock
to business operations. Every risk does not
warrant a complete halt—it needs to be assessed
in terms of materiality and real-world impact.
Disclosures must be accurate, but they should also
be pragmatic, ensuring that they do not paint an
exaggerated picture of risks.
INTERNAL AUDIT TODAY