Just 21% of the Heads of Internal Audit at FTSE 250 companies* say that their firms have made or are currently making contingency plans for the possibility of a British withdrawal from the European Union according to a survey by the Chartered Institute of Internal Auditors (The Institute).
The survey also found that 10% of the FTSE 250 Heads of Internal Audit said that they had no intention of making any contingency plans for a British withdrawal from the EU. 62% said that they planned to do so, but that it was not yet possible, due to uncertainty.
For internal audit the risk of Brexit is a risk like any other; the function should assure the board that any risk is being managed satisfactorily by the business.
The Institute says that while Brexit might constitute a strategic risk for organisations, uncertainty about the process, the timing and the consequences might make contingency planning challenging at the moment.
The Institute says that 77% of FTSE 250 Executive Boards have discussed the implications of a possible Brexit.
Ian Peters, Chief Executive of the Institute, comments: “The good news from our survey is that, clearly, Brexit is being considered by most FTSE 250 companies, at a senior level.
“However, our survey shows that most boards haven’t undertaken contingency planning yet, but most plan to. But the challenge is that uncertainties about what Brexit may mean are making planning very difficult at the moment.
“If the UK votes to leave the EU, until negotiations are at least substantially complete, planning is going to be difficult. Overall, we felt that most companies were taking the prospect of BREXIT seriously. However, those firms which have not yet discussed the implications should at least start to think about possible outcomes.”
*Results of a Chartered Institute of Internal Auditors’ February 2016 Survey of FTSE 250 Heads of Internal Audit
15 April - FT (login required)