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How a rapidly growing cable company repositioned its internal audit function to keep pace with its changing portfolio of risk

Client’s challenge

As the result of a merger that doubled the size of a major cable and entertainment company, the organization’s senior audit and risk management executives were concerned about the capabilities of their internal audit function. In short, the executives wanted to establish an internal audit approach that would be responsive to an evolving risk profile, leverage industry-leading practices, and align with the organization’s rapidly changing business environment.

Recognizing that their objectives would be difficult to achieve without external assistance, the executives turned to PwC. Criteria influencing their decision included PwC’s extensive resources in internal audit as well as in governance, risk and controls; its first-hand knowledge of the entertainment, media and communications industry; and its demonstrated understanding of how technology, process and change management resources must be engaged in support of business and internal audit objectives.

PwC worked with the company to develop an expanded listing of risks that could be addressed by the internal audit function in support of the combined company. PwC conducted a three-day training program for the company's internal audit staff that focused on the company's key financial, operational and compliance risks, as well as control issues common to the industry.

A team of PwC IT specialists then led an assessment of the company’s information technology audit risk. The assessment assisted management in assessing its plans to expand the IT function in a way that would improve both backoffice and client-facing technologies while considering the company's risks and key value drivers.

PwC also helped develop and implement a strategic, risk-based assessment process that effectively managed overall compliance costs while confirming the adequacy of the initiative’s scope, approach, methodology and testing techniques. Subsequently, when the Sarbanes-Oxley 404 readiness became a top priority, PwC provided insight and project management knowledge, as well as a broad set of tools and templates.

As the professional relationship evolved, the company’s management placed greater emphasis on developing a strategy for managing the expanding list of laws and regulations risks confronting the organization. To support this initiative, PwC provided industry-specific knowledge that helped the company compile a comprehensive summary of compliance risks.

In addition, PwC worked closely with management to develop a continuous monitoring process to assist in the timely identification and mitigation of material risks. During this period, PwC also provided guidance relevant to both the cable and telecommunications industries in support of management's re-engineered approach to cable system audits — enabling the company to expand the scope of those audits while improving oversight.

In the months following the merger, PwC helped the company quickly redesign its internal audit function to support the combined entity's more complex portfolio of risks. While PwC continues to assist the organization with this transformation, the principles and practices that will help the company achieve its goal of becoming "best-in-class" have already been institutionalized. Many of the organization’s audit and risk management executives have also acknowledged a renewed confidence in their internal audit function’s ability to support the company

Contacts

Dennis Bartolucci: US Internal audit services leader

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