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IIA STUDY FINDS ROLE OF INTERNAL AUDITING IS EVOLVING; OPPORTUNITIES TO ENHANCE VALUE REMAIN

Source: IIA
Country: International
Date: 18/04/2012
Contributor: Bob Schneider
Web: https://na.theiia.org/Pages/IIAHome.aspx
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Many chief audit executives (CAEs) are exploring strategies for enhancing their organizational value, yet opportunities remain to better align planned audit coverage with risks deemed important by key stakeholders. These are among the key findings of the The IIA’s semi-annual Pulse of the Profession report, an assessment of the state of the internal audit profession in North America.

Significant realignment already is underway, says the report, which is based on an IIA Audit Executive Center survey of 461 U.S.- and Canada-based audit executives. The report notes respondents’ internal audit plans are reflecting more of a rebalancing of coverage among operational, financial and compliance to more clearly align with the risks related to these areas. This is in contrast to much of the past decade, during which audit plans tended to focus on financial risks and controls, and compliance with the Sarbanes-Oxley Act of 2002. For example, 27 percent of respondents’ 2012 internal audit efforts are focused on operating risks. This percentage is notably higher than planned coverage of general financial risks (16 percent), compliance risks (15 percent), and Sarbanes-Oxley testing (12 percent).

Respondent CAEs are recruiting staff with the experience and capabilities needed to address their evolving audit plans, which signals a shift from years past where the focus was on accounting and finance skills. For example, the top five skills sought by respondents for staff they plan to hire this year are:

(1) Analytical and critical thinking (73 percent)
(2) Effective communication (61 percent)
(3) Data mining and analytics (50 percent)
(4) General IT knowledge (49 percent)
(5) Business acumen (46 percent)

The report says the formal reporting relationships of CAEs continue to reinforce internal auditing’s organizational independence and stature. More specifically, 75 percent of survey respondents now report functionally to the audit committee. When asked to describe their relationship with the audit committee, the leading characterizations are:

(1) There is open dialogue and a two-way flow of regular communication (76 percent).
(2) The audit committee clearly communicates its support for the internal audit function to the full board and senior management (72 percent).
(3) The audit committee looks to the CAE for advice and counsel (50 percent).

The IIA Audit Executive Center’s Pulse of the Profession survey report is available for download.
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