Jan 11 2010
Two thirds (67%) of internal auditors believe that they are under-resourced, and consequently unable to carry out their job effectively, according to a survey (1) of internal auditors carried out by Protiviti, the leading independent risk consulting company. Just 14% of them believe they have access to all the skills required to meet the requirements of their audit charter.

The survey was carried out at the recent Institute of Internal Auditors (IIA) annual conference, where Bob Hirth, Executive Vice President of Internal Audit at Protiviti was guest speaker. Of those questioned, 40% said that prior to the recession, their internal audit function was not focused on the right risks, and therefore unable to adequately assess and carry out their requirements.

Sukhdev Bal, Director, Protiviti said: The last couple of years have exposed deep flaws in the governance and risk management landscape. We believe that internal audit can help to address these flaws, but to do this, there needs to be a clear understanding of the evolving role, requirements and expectations of internal audit. Internal auditors must continue to enhance their skills and educate themselves on new technologies and competencies that will be required by their organisations in the months and years to come.

This survey is a clear indication that internal auditors themselves believe that prior to the recession, they were not fit for purpose in terms of focus, skills and capabilities. Audit committees, Internal Audit leaders and management need to work more closely and collectively to agree the role of audit, objectives, criteria for audit and the overall approach of the internal audit function required to meet current and future evolving needs. Importantly, having agreed these, they need to ensure that the function is staffed with the right skills, capabilities and experience to meet these objectives.

Protiviti believes that there is a real opportunity for internal audit to demonstrate the value it can add to an organisation by fulfilling a critical lead role in helping management and the board to better understand, assess and mitigate the organisations risks while remaining nimble and flexible enough to change when necessary. This can only be achieved with the full support of management. Senior management need to support and value the work done by an internal audit function. It must also make the effort to understand and help the internal audit process succeed.

Mr Bal continued: Ultimately, this survey highlights the pressing need for change within the internal audit function, with an obligation on the organisation to help facilitate and be a true partner to this process. Internal audit needs to work to develop closer relations with line management and the Board and in an integrated way know the risks facing the business, challenges in managing these risks and thereby provide effective assurance. Companies forget that internal audit effectiveness is significantly impacted by the expectations of management and the support, explicit and implicit, that they provide - so this overhaul needs to be positioned as a collective challenge throughout the organisation.

Key
(1) Protiviti surveyed internal auditors from the Institute of Internal Audit annual conference held in October 2009.

About Protiviti
Protiviti(www.protiviti.co.uk)is a global risk and business consulting and internal audit firm composed of specialists in risk, advisory and transaction services. The firm helps solve problems in finance and transactions, operations, technology, litigation, governance, risk and compliance. Protivitis highly trained, results-oriented professionals provide a unique perspective on a wide range of critical business issues for clients in the Americas, Asia-Pacific, Europe and the Middle East.