State of the Internal Audit Profession study 2011

April 2011 
 

The results of the seventh annual Global State of the Internal Audit Profession survey were announced a few days ago by PwC US. The survey was conducted in the fourth quarter of 2010 and includes responses from over 2,500 Chief Audit Executives from 46 territories.

More than 20 Greek companies participated in the survey, representing almost all industry sectors, including banking, telecommunications, transport, commerce, manufacturing, health, and utilities.

The most important finding of the survey was that internal audit professionals that have a macro view of their companies can play a significant role supporting company growth strategies through their involvement with areas such as emerging markets, mergers & acquisitions, social media, the cloud, and navigating the regulatory labyrinth. However, the survey indicated that many internal auditors are not addressing the risks related to those strategies.

For example, it is worth noting that this year’s survey showed a disparity between CEOs’ and internal auditors’ main focus when it comes to risk areas such as growth and technology. While CEOs are focused on growth in newer geographic markets, internal auditors indicated that they are least involved in those areas. Similarly, while 70 percent of CEOs plan to invest in IT, less than 25 percent of internal auditors plan to be involved in auditing the risks of cloud computing or social media. In contrast to this situation though, CEOs and internal auditors have a shared focus on government regulation, as overregulation ranks among CEOs’ top concerns and nearly 60 percent of internal auditors expect to increase their attention to regulatory compliance programs in their audit plans during 2011.

The study identified three important focus areas for internal audit departments and the relevant risks, including the following:

  • Strategic growth: emerging markets, mergers & acquisition activity, innovation and new product development
  • Information technology: security and data protection risks related to emerging technologies such as eMobility and cloud computing, data loss and distribution of malware
  • Regulation: the expanding reach of regulations, changes due to financial reform, and sustainability reporting

“It is important that internal audit leaders stay on top of CEO business strategies,” said Kostas Perris, head of the Internal Audit Services Department of PwC in Greece. “Emerging markets, technology and regulation are quickly evolving, and the risks associated are quickly changing as a result. If internal audit can keep up with these changes, CEOs and other company stakeholders will see it as a dynamic business function and elevate its importance to the business.”

 

For the Greek version, click here

For downloading the full study, click here