Despite strong ambition from CAEs to grow their value to the organization, PwC’s 2017 State of the Internal Audit Profession study shows Internal Audit is losing ground in trying to keep pace with stakeholder expectations. In the five years we’ve been tracking this sentiment, 2017 represented the lowest stakeholder perception of Internal Audit value.
Stakeholders, however, remain committed to wanting Internal Audit to play a greater and more value-added role. While few (7%) consider IA to be a trusted advisor today, nearly half (48%) want Internal Audit to be a trusted advisor to the business within the next five years.
In this third and final installment in the True North trilogy, our 2017 State of Internal Audit Profession Study looks outside of Internal Audit at the influences disrupting organizations today and how Internal Audit can build the resiliency and adaptability to continue to evolve and increase its organizational value amidst disruption.
“To meet business expectation, Internal Audit needs to be able to execute more agile audits. Speed and flexibility are key—getting the work done and reported quickly; less of audits running on for weeks.’’
Respondents’ expectation of disruption in the future is higher than their experience to date so now is the opportunity for IA to build upon the traits needed to demonstrate more value through its role related to business disruption. In light of that, we grouped respondents that indicated their IA function significantly contributed to helping the company navigate disruption – those who are making a distinct contribution in many disruptive areas, not just those areas traditionally addressed by IA or compliance functions.
Our survey, along with the more than 70 interviews conducted globally for this year’s study, found that Agile IA Functions are more frequently involved in a broader range of disruptive events and often act as Trusted Advisors to their businesses. We use this paper to explore the disruptive environment and to discuss two key traits that enable Agile IA functions to effectively lead in disruptive environments – they are prepared and they are adaptive. Agile IA Functions are able to anticipate potential disruptions and rapidly change course to respond to an evolving risk environment.
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