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Audit body raises alarm on Brexit preparedness

16 Oct 2018

Audit body raises alarm on Brexit preparedness

New research reveals over a third of organisations have yet to plan for Brexit

A new Chartered Institute of Internal Auditors survey of Chief Audit Executives (CAEs) has revealed that more than one in three organisations has yet to do any Brexit scenario planning, despite there being only 164 days to go until the UK leaves the EU.

Whilst the ‘Brexit Preparedness Survey’ found that 53% of respondents say their organisation has undertaken Brexit scenario planning, over one third of respondents (37%) indicated that their organisation still has not carried out any work in this area. This is in spite of the fact that 82% of respondents say their organisation does anticipate being affected by the risks associated with Brexit.

When asked to identify the main difficulties organisations faced in scenario planning for Brexit 79% of respondents cited a lack of clarity from Government on its preferred Brexit deal, 68% cited the number of scenarios they would have to plan for, and 55% cited lack of available information. Respondents were also asked whether their organisation had received an appropriate level of engagement and information from Government to assist in preparing for Brexit, with only 15% answering ‘yes’ and 40% answering ‘no’.

Other key findings from the Brexit Preparedness Survey include:

  • On a more positive note 75% of organisations have established a Brexit working group, while 25% still have not.
  • 59% say Brexit has impacted other key risk areas in their organisation.
  • When asked what those key risk areas are 69% said regulatory uncertainty, 61% said difficulty in recruitment and 57% said supply chain issues.
  • 38% of organisations have not assessed the implications of a no-deal Brexit, 51% have.
  • 42% of organisations have not assessed the Chequers agreement, 29% have.

Commenting on the findings Dr Ian Peters MBE, Chief Executive of the Chartered Institute of Internal Auditors said:  “Given Brexit represents the biggest strategic risk to the UK’s future prosperity since the financial crisis of 2008, it is somewhat concerning that over a third of organisations are yet to carry out any scenario planning, despite the fact that 82% say they anticipate being affected by Brexit.

“We would therefore urge senior management and boards to make sure they are working closely with their internal audit function to ensure their organisation is adequately managing and mitigating the high level of risk associated with Brexit. With just 164 days to go until the UK leaves the EU – deal or no-deal – it is high time organisations got on and made sure they are prepared.”

-ENDS-

FOR PRESS ENQUIRIES: CONTACT GAVIN HAYES, HEAD OF POLICY AND EXTERNAL AFFAIRS ON 07900 195591 / GAVIN.HAYES@IIA.ORG.UK

Notes to editors:

About the survey

The Brexit Preparedness Survey received responses from a total of 95 Chief Audit Executives (CAEs) based in the UK and ran from 13 September 2018 to the 12 October 2018.

The views of CAEs are significant in the context of Brexit as these are the executives within organisations with the responsibility of working with senior management and boards to ensure they are managing and mitigating their major risks effectively. Because Brexit is a key risk area we’d expect CAEs to have a professional view and specialist insight on how their organisation is preparing.

About the Institute

The Chartered IIA is the only professional body dedicated exclusively to training, supporting and representing internal auditors in the UK and Ireland.

First established in 1948, we obtained our Royal Charter in 2010. We have 10,000 members in all sectors of the economy. Over 2,000 members are Chartered Internal Auditors and have earned the designation CMIIA. About 1,000 of our members hold the position of head of internal audit and the majority of FTSE 100 companies are represented among our membership.

Members are part of a global network of 180,000 members in 170 countries, all working to the same International Standards and Code of Ethics.