Situation
Internal audit organizations have been so consumed by Sarbanes-Oxley that other priorities are falling by the wayside. Simply put, the legislation is diverting internal audit resources from risk-based auditing, creating the potential for dire consequences. That’s because a failure to address key strategic, operational and compliance risk areas in an internal audit program undermines the effectiveness of internal audit, diminishes its strategic value to key stakeholders, and exposes the enterprise to greater operational and financial risks in
the future.
Our perspective
As companies prepare for ongoing Sarbanes-Oxley compliance, they need to clarify the role of their internal audit organizations. Equally important, they must rebalance their internal audit resources to meet evolving enterprise needs. This effort requires facilitating any short-term tactical changes and long-term strategic plans that may be necessary for an internal audit function to have the resources it needs—not only to address Sarbanes-Oxley requirements, but to account for operational risks as well.
Implications
Regardless of the extent to which internal audit organizations are invested in Sarbanes-Oxley compliance, their ongoing success depends greatly on achieving and maintaining alignment with stakeholder expectations. And given the fluid nature of these expectations, there’s a constant need to rebalance internal audit priorities and resources in order to effectively address multiple risks. To this end, we suggest a six-step framework to help organizations achieve a successful balance between demands, priorities and resources, as well as aligning their efforts with stakeholder expectations.
Learn more about the situation, PwC’s perspective, and our six-step approach to long-term rebalancing of internal audit policies.
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How to rebalance internal audit priorities in the Sarbanes-Oxley era* (64kb).
