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Is your internal audit team ready for Brexit?

20 September 2018

Brexit has the potential to be the biggest disrupter to UK organisations for decades; influencing everything from regulations, trade markets and people movement to the value of sterling. Disruptive events invariably unleash a barrage of challenges but they also present a raft of opportunities for those who see them.

Whatever the 'divorce agreement', unravelling the UK from the EU will be complicated and have specific impacts within different sectors. It is important that internal auditors are well informed to be able to have constructive dialogue with the business; our advisory role may be highly valued in the months to come.

Should this be a regular discussion topic at team meetings? There is a wealth of information available from bodies such as the ICAEW, BDO, Local Government Association for example. Whilst the government itself has recently published a raft of technical papers aimed at specific sectors in the event of a 'no-deal' scenario. 

Our intellectual curiosity and risk knowledge means we can debate and consider the potential consequences of Brexit for our organisation. Identifying emerging risks is a worthwhile exercise. Is there a risk function doing this – work with them – be on the front foot. Encourage decision makers to get involved, share thoughts with them. Use your network, work collaboratively; this will undoubtedly be a time for learning.

The politics of the Brexit decision can polarise people. Internal auditors need to be mindful of their own and others’ unconscious bias when discussing issues or providing assurance. If board members, particularly the CEO or CFO, have been vocal leave/remain advocates how is this influencing decision making? We are the custodians of independent and objective thought within our organisations; we have a duty to share this.

We are fast approaching 2019 and a new audit year. Many audit plans are already being formed. What Brexit assurance is being planned? Readiness audits are a proactive approach, perhaps these have started already? There might be project audits or process re-engineering; whatever the impact on your organisation there will undoubtedly be new risks requiring assurance. The plan for next year may well look different to normal.

Flexibility may be the theme for the year ahead. Internal auditors that like an element of routine may need to brace for impact! Do your ways of working embrace this or could it be a challenge? Have you tried agile auditing yet? It’s a great methodology for when the end goal is still being refined but you need to get started. It also requires short sprints of assurance which could suit the pace of Brexit change that will be needed.

There may be some risks where specialist knowledge is required to provide assurance at the level the organisation needs such as customs or investments in new markets. Where can you access this knowledge? Should the audit committee be warmed up to the possibility that the internal audit budget may need to be increased for Brexit?

For most organisations there will be change of some sort. How well do you deal with change as a team? Are you individually and collectively adaptable or less keen on doing things differently? Would it be helpful to do some team building so you can go into the Brexit season fully prepared, ready to support each other and the business?

And finally, embrace the experience! This is an opportunity to build knowledge and develop new skills.

Content reviewed: 1 February 2023