Regular readers of my blogs will know that I frequently share highlights from new research or thought leadership that sheds light on the trends and outlook for internal audit. In addition to sharing reports by others, I also work with AuditBoard to articulate our perspectives on the ongoing challenges and opportunities facing the internal audit profession.
This week, we released our latest report: 2023 Focus on the Future – Internal Audit Must Accelerate its Response in Addressing Key Risks. The report is based on a survey of audit leaders conducted in September and October 2022, and reveals a lack of alignment between top risks facing businesses and the level of effort internal audit is putting toward those vulnerabilities. And, despite repeated signs of a looming economic slowdown that could further impact businesses in the year ahead, internal auditors are generally optimistic about their budgets and available talent, though they acknowledge the challenges that current resource levels present in the face of mounting uncertainty.
As I note in the report, headlines in 2022 have read like history books. As the year ends, inflation is soaring around the world while signs of economic downturn abound. The possibility of stagflation — where inflation and recession coexist — is but one of many signs of uncertainty our organizations face in the year ahead. War in Europe has exacerbated fuel prices and supply chain, cyber, and third-party risks that were already creating disruption. Equity markets are on a perpetual roller coaster, propelled by Wall Street’s day-to-day swings between pessimism and optimism.
Yet, internal audit functions appear to be coasting in increasingly turbulent times, exhibiting a calm that may be masking challenges in preparing for and, importantly, addressing existing and emerging risks. Frankly, 2023 may present more challenges than internal auditors think.
The AuditBoard report is rich in data and there is no way to recap all of the content in a short article. Please check out the full report and I welcome your thoughts in response to this blog post.