Internal audit enhancements a must: PwC

Companies are aiming for higher performance to contend with the ever-changing risk landscape, but are not raising the bar on internal audit at the same pace, according to the PwC State of the Internal Audit Profession survey.

Read: Investors wary of internal audits: PwC

The survey shows that 80% of respondents believe threats are increasing, yet only 12% think their own organization manages risk extremely well. Stakeholders are also requesting increased capabilities with internal audit’s contribution in emerging risk areas such as large program assessment, new product introductions, capital project management and mergers and acquisitions.

“For internal audit functions to maximize their value to the organization, they must ensure alignment on multiple levels,” says Matthew Wetmore, partner and leader of PwC’s Canadian Internal Audit practice. “There must be alignment of stakeholder expectations, a focus on the highest risk areas, and an eye towards both the internal audit capabilities needed today and the emerging needs of tomorrow.”

Read: CFOs, audit committees feel the heat

PwC outlines key steps audit committees, management and chief audit executives can take to enhance the value internal audit delivers to organizations:

• Audit Committee: Ask more questions Most audit committees consider oversight of risk management to be a primary responsibility. However, they should ask if the internal audit’s actions align with critical business risks and if internal audit has established a clear, strategic plan to raise capabilities and deliver value.

• Management: Expect more Management teams should require their organizations to have a strong enterprise-wide risk assessment process, enabling management, internal audit and the board to have a productive and transparent discussion about risk management.

• Chief Audit Executives: Deliver more Chief audit executives should have a strategic vision that aligns to stakeholder expectations, including a strategy for investing in the right resources. They must also be prepared to engage in conversations with the board and management about internal audit’s performance.

Read: Preparing for audits

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