Make better use of our resource internal auditors tell business

A new report by the Institute of Internal Auditors and Deloitte “Towards a Blueprint for the Profession” reveals that many internal auditors believe they can increase the value they provide to their organisations by extending their reach into wider risk areas such as reputation, technology and projects as well as financial control. Only 15% said that these areas were part of their remit now but five times as many expected them to be so in 2012.


According to the report, whilst they also want to challenge management and act as a catalyst for improvement across the business, the key role for Internal Audit continues to be the provision of independent and objective assurance on key risks.


The latest report builds on the influential 2003 report “The Value Agenda” and reveals that, five years on, whilst risk and control frameworks have been strengthened organisations are still not doing enough to identify, manage and control their key risks.


David Noon, Partner in Charge of Internal audit and Risk Management at Deloitte said:

“Organisations must perform better in controlling their risk areas if they are to optimise business performance and maximise the interests of stakeholders. Our survey with the IIA shows that 30% of organisations cannot or do not show how their current assurance activities relate to their key risks. How then do they know that time and money invested in mitigating key risks is not wasted?”


Gail Easterbrook, Chief Executive, Institute of Internal Auditors – UK and Ireland warned:
 
“The number one challenge facing internal audit functions is a lack of skilled and experienced staff. Inadequate assurance over key risks will remain a problem unless organisations make the investment needed now”.

Report’s key findings
• Only half of internal auditors feel their organisation has a good understanding of the risks they faced, could prioritise those risks, and respond to them effectively
• Inadequate risk assurance remains a problem due to the significant shortage of people with internal audit skills
• Internal auditor’s at large organisations are winning the argument for resources, but others must do more to make their case.


Key findings moving forward
• The report identifies that in order for internal audit functions to move forward they should work more closely with senior management to ensure the key risks to their organisation are identified.
• Organisations need to identify skills gaps which stop them providing management with assurance over key risks and work with management to plug those gaps
• Internal audit teams should take care that they only move into new areas if they can agree with management that this will be valuable in providing assurance over key risks and if they are confident that they have the required skills.


  Towards a blueprint for the internal audit profession