There are very few people and few organizations that haven’t yet been touched directly or indirectly by the troubled economy. Everywhere we turn, individuals and organizations are making adjustments — tightening here, cutting there, and paying closer attention to how resources are being spent. Just a look at this week’s headlines gives you a good indication that everyone’s watching their step. What a perfect opportunity for our profession to step up to the plate to lead the charge in asking, “How do we adapt?”
To capture in-depth and qualitative analysis of these opportunities and how the internal audit profession can be of utmost value in this changing environment, The Institute of Internal Auditors (IIA) pulled together chief audit executives (CAEs) from some of the largest companies — primarily Fortune 100 companies, as well as several from the Fortune 250 — and representatives from internal audit service providers, the U.S. Public Company Accounting Oversight Board, and the U.S. Securities and Exchange Commission. The roundtable discussion was held during The IIA’s General Audit Management Conference in Washington, D.C. last month and has resulted in a new white paper titled, “A World in Economic Crisis: Key Themes for Refocusing Internal Audit Strategy.”
Roundtable participants candidly offered their insight and strategies for redirecting the focus of internal audit activities to meet the challenges of today’s environment. Key questions focused on finding out the biggest impact the economic crisis has had on internal auditing, how the internal auditor’s role has changed over the last 12 months, what issues are different now and how they have changed the internal audit strategy, and the lessons learned that will lead us forward.
We found out that CAEs are helping their organizations navigate through the current crisis in a variety of ways. Most roundtable participants said they are making their internal audit activities more flexible by adjusting to stakeholder expectations and changing risk priorities. By linking their audit plan to business strategies and current risks, internal auditors are shifting priorities from a financial and compliance focus to a more operational and ERM effectiveness strategy. Roundtable participants suggested several leading practices and strategies that can be boiled down to 10 key takeaways:
As a precursor to the roundtable, The IIA conducted a survey to get perspectives on the causes and effects of the financial meltdown, as well views of how companies are adapting. The survey resulted in responses from 364 internal auditors in the United States — 117 who work in the financial services sector and 34 who work for Fortune 100 companies. The survey data helped guide the roundtable discussions.