Leading organizations leverage internal audit to compete in marketplace: PwC

Audio podcast series explores key issues affecting businesses and shares strategies companies can use to address them: www.pwc.com/ca/strategytalks

November 18, 2009 — In the face of unprecedented economic times, internal audit functions in organizations are looking beyond focusing on regulatory compliance and turning their attention to managing operations and risks more efficiently. Indeed, according to a recent PricewaterhouseCoopers (PwC) podcast in the Strategy Talks series, “Internal Audits – A New Strategic Position”, by refocusing on strategic processes, internal audits can provide critical value in a time of crisis.

“Traditionally, internal audit ensured that an organization complied with governance and risk controls-related regulations,” says Mike Harris, leader of PwC’s Internal Audit practice in Toronto and interviewee in the podcast. “More and more, leading organizations are turning to internal audit to analyze business processes, procedures and activities with the goal of highlighting organizational problems and recommending solutions, such as how effective an organization plans a particular project—and whether or not they are making money on it.”

Management and audit committees expect internal audit to be a significant contributor in addressing the present economic challenges and providing assurance on how well risks are being managed. To help internal audit meet stakeholder expectations and add strategic value, some of the tips identified in the podcast include:

• Have a solid understanding of the key objectives, risks and priorities driving the business, from financial controls to IT. From there, align the internal audit plan with these elements, and bring on the right people to execute against the plan.
• Use the right tools to audit greater volumes of data. Technology, such as Audit Common Language (ACL) or other Computer Assisted Audit Techniques (CAATs), can enhance the depth of audit analysis and efficiency of the audit process overall. By analyzing a larger data set rather than a small sample of transactions and processes, internal audit can create a more compelling argument for their recommendations.  
• Consider third-party contracts. To stay on budget, many companies are looking to third-party vendors to neutralize costs on existing and future spend. Look to procurement, and identify areas of improvement by using best practices from other industries and companies.  

Matthew Wetmore, leader of PwC’s Western Canada Internal Audit practice and interviewee in the podcast, adds: “A strong internal audit function that is integrated into the business can be a competitive advantage for many companies. They should be a business partner at the table alongside with the Board of Directors and senior management—looking at controls and processes from a compliance, process improvement and cost recovery perspective so that the business can run and compete effectively.”

The Strategy Talks series of audio podcasts explores key issues affecting businesses and shares strategies companies can use to address them. The podcasts feature interviews between Dean Mullett, partner and co-lead of the Restructuring and Distress Strategy Group and the Credit Crisis Task Force at PwC, and Helen Mallovy Hicks, a partner in the Valuations group of PwC’s Advisory Practice and industry thought leaders to offer insight and practical advice on how companies can survive—and even thrive—as we emerge from this troubled economy.

Recent podcasts include:

• Extracting Value in a Down Economy – The Mining Industry in Canada
• Sustainability Practices Make Good Sense for Your Business
• Litigation – 3 Keys to Success
• Performance Management – 7 Practices that Drive Superior Results
• Oil and Gas – How the Changing Prices May Affect your Business

To access this and other Strategy Talks podcasts, visit www.pwc.com/ca/strategytalks.

For more information on how your internal audit function can add value, visit www.pwc.com/ca/internalaudit.