Internal audit departments needs to provide more support to their organisations to help executives manage market disruptions, particularly in the areas of regulatory changes, cybersecurity and changes to customer preferences. Executive opinion of the value of internal audit has fallen to a five-year low, according to the State of the Internal Audit Profession report by PwC. It found that the internal audit function needs to integrate more with the company to prove its intrinsic value. The percentage of stakeholders that view internal audit as “contributing significant value” dropped from 54 per cent in 2016 to only 44 per cent in 2017. The survey's respondents also said, however, that if internal audit were to take on a more integral role, it would be able to provide better support in managing market disruptions, such as unplanned or unanticipated events.
PwC's Jason Pett said: “In a world of constant disruption, internal audit leaders need to think differently to accomplish more dramatic transformation and demonstrate their vitality. Particularly, they must be well-equipped to mitigate risk in several disruptive areas including regulatory changes, cybersecurity and changes to customer preferences – the disruptors most likely to impact businesses over the next three years.”
Nine factors that make internal audit more valuable to your organisation
The survey polled 1,900 respondents and found that 18 per cent said their internal audit function plays a valuable role in helping the organisation anticipate and respond to business disruption. It also found that the internal audit functions that contribute value to their companies are able to provide services in the following ways:
- they are forward-looking and able to identify emerging disruptions and associated business needs;
- collaborate with other lines of defence in a unified and integrated manner and make decisions mutually supported by others in the organisation;
- build the eventuality of disruption into planning and risk assessment;
- work with other risk management and compliance functions to address disruption;
- invest in and elevate business and technical IQ with advanced technology and encourage the development of trending and analysis techniques;
- their processes are transformative across audit plan development, audit planning, fieldwork and reporting;
- use innovative talent models as needed and routinely reorganise or redirect resources according to disruption;
- create more flexible processes and reporting mechanisms, changing course and evaluating risk at the speed required by the business;
- increased the use of data mining and data analytics for continuous auditing/monitoring of trends and potential impacts of disruption.
Like this item? Get our Weekly Update newsletter. Subscribe today