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EQA

Latest IIA survey results - new year, new insight?

Technical blog by Liz Sandwith, chief professional practice advisor |  10 January 2017


According to a recent news item the city ‘fat cats’ had by mid-day on Wednesday 4 January earned more than the average wage in the UK, a good note on which to start the year if you are one of them, but then I thought internal auditors will have a new, exciting and innovative year to look forward to. So given a choice I would much rather be an internal auditor than a ‘fat cat’!

The 2016 Governance and Risk Survey results

In order to inspire us let’s look more closely at the latest annual survey – the fourth one we’ve done - to see if it tells us something that perhaps we didn’t already know or provide confirmation of what we thought was the case.  

I have pulled out some of the more interesting results that struck a chord with me, namely:

  • 28% of internal audit are also responsible for risk management – this is now reflected in the new IIA Standard (1112) which states ‘Where the chief audit executive has or is expected to have roles and/or responsibilities that fall outside of internal auditing, safeguards must be in place to limit impairments to independence or objectivity’

  • 80% of heads of internal audit were internal auditors before being a head of internal audit – this demonstrates positive career progression for internal auditors

  • 77% of respondents said that the size of their internal audit function was 10 or less, this means that from an Institute perspective we need to recognise that smaller internal audit teams are the norm and those internal audit team of 100+ are rarer than perhaps we had all imagined

  • 67% of heads of internal audit have a functional reporting line to the Chair of the Audit Committee compared to 6% who report to the CFO – in the private sector this is a continuous year on year improvement and clearly demonstrate the importance of internal audit independence and reporting lines within organisations

  • 56% of heads of internal audit sit at the ‘other management’ level in their organisation’s hierarchy, this means they don’t sit at either Board or Executive Committee level which is disappointing and a potential hindrance to the internal audit activity undertaking audits of key topic areas such as an organisation’s culture, strategy, or risk management framework

  • 79% of internal auditors currently spend time and effort in the corporate governance space, and 77% spend time and effort on fraud.  These are encouraging statistics but, in the case of corporate governance, are internal auditors making it clear to boards and regulators the value that they are adding?

  • 51% of respondents said that economic uncertainty would be one of the risks facing the organisation in 5 years’ time yet currently internal audit is spending less than 8% of its time and effort on economic uncertainty, similar data applies to government economic policy i.e. 34% vs. 4% time and effort. In view of these responses  i.e. risk in five years vs time and effort I wonder if we need to rethink the internal audit focus so as to ensure that we are able to incorporate those risks that potentially will impact the organisation during the life of its strategy plan into the audit universe?

  • 52% of internal audit activities undertake an external assessment regarding compliance with the IIA Standards every 4-5 years, 28% do not conform to the Standards in that they either have an external assessment less frequently that every 5 years or never have one

  • In the forthcoming year 55% of respondents said there would be no change to their budgets and 63% said there would be no change to the internal audit headcount

What happens next?

We use the survey results to promote the profession as well as to support you. Information regarding the survey will be presented in the next edition of the magazine but I thought you might be interested in some of the results as you start a new calendar year, I hope those results that struck a chord with me also provide food for thought for you and perhaps an opportunity to rethink your approach!

Content reviewed: 22 March 2018