The Questions Boards Don’t Ask—and Why They Matter

A practical guide to help directors ask more thoughtful questions about internal control—before trust is lost.

How reliable are the financial reports your board receives?

For too many boards in developing countries—especially private companies and nonprofit organizations—this question is assumed or ignored. Yet, beneath those glossy spreadsheets and income statements may lie a deeper problem: ineffective internal control over financial reporting.

The risk is not always fraud. It is sometimes more subtle, more systemic: a lack of understanding by non-executive board members of how internal controls work, and how they break down.

This is not a fault of integrity. It is often a gap in technical knowledge. Most board members are not accountants or auditors. They rely on internal audit reports and management presentations without the tools to assess whether the foundation of those reports—internal control—is sound.

This knowledge gap creates a silent vulnerability. Even well-meaning boards can be misled when internal control is weak or poorly implemented. Financial reporting loses credibility. Decisions are made on flawed data. Accountability suffers.

It doesn’t have to be this way.

A Practical Solution: Ask Better Questions

Board members don’t need to be technical experts. But they must be able to ask intelligent, targeted questions—especially when reviewing internal audit reports.

Below is a digital checklist explicitly designed for non-executive directors with modest knowledge of internal control. It provides five strategic themes with thoughtful, practical questions to help boards assess the reliability of their financial reporting.

Use it as a tool. Use it as a shield.

Smart Questions for Board Members to Ask the Finance Department

1. Control Design and Coverage

• What are the main financial risks we face, and how are they being controlled?

• Are all major financial processes—like cash, payroll, procurement, and reporting—covered by internal control?

• Who is responsible for reviewing and updating our internal controls, and how often is this done?

2. Roles, Responsibilities, and Segregation of Duties

• Are duties separated between those who approve transactions, record them, and reconcile the accounts?

• Are any individuals performing multiple roles that could lead to conflicts or errors?

• When was the last review of staff responsibilities in financial operations?

3. Control Execution and Consistency

• Are the controls we’ve designed being followed in practice?

• Do internal audits show consistent application of controls across departments or locations?

• Are there any repeated issues or audit findings that remain unresolved?

4. System Weaknesses and Responses

• Have there been any control failures or close calls this year? What triggered them?

• What does the internal audit identify as the top internal control issues, and what’s being done to resolve them?

• Is there a report tracking the resolution of these issues?

5. Reliability of Financial Reports

• Based on the strength of our internal controls, how confident are you that our financial reports are accurate and complete?

• Are there areas where weak controls may lead to misleading or incomplete reporting?

• What assurance do we have that material misstatements would not go undetected?

Red Flags Worth Escalating

If answers are vague, delayed, or overly technical, this may indicate a larger problem. In such cases, boards should consider engaging an independent external review or escalating concerns through the audit committee.

This checklist is not about ticking boxes. It is about asking the right questions—before it’s too late.

As governance becomes more complex and public scrutiny grows, board literacy in internal control is no longer optional—it is a safeguard of institutional integrity. Boards that ask the right questions make better decisions, protect stakeholder trust, and reduce corruption risks.

Let us empower boards to lead not only with intention—but with insight.

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