Internal Audit Solutions for Tough Times
Greetings from San Diego, where The IIA’s aptly titled conference, “Internal Audit Solutions for Tough Times,” is wrapping up. It has been a great event with some very thought-provoking discussions on how the global economic crisis is impacting our profession. In a pre-conference survey of U.S. internal audit practitioners, we learned:
- 74 percent of internal audit functions experienced flat or declining budgets in 2009.
- Almost one-third experienced outright reductions over the past 12 months.
- The outlook for 2010 does not look much better with 80 percent anticipating flat or declining budgets.
- 57 percent have increased coverage of operational risks in the past year.
- 49 percent have increased coverage of cost/expense reduction or containment for their companies.
- 51 percent have increased coverage of company exposure to third parties in financial distress.
- In 2010, respondents expect to dramatically increase coverage of operational risks, financial risks, compliance risks, and the overall effectiveness of risk management.
With their operating environments evolving rapidly, internal auditors face a number of key challenges in 2010. In a keynote address on August 25, I outlined the 10 most significant challenges that I think internal auditors will face during the coming year:
- Aligning internal audit coverage to meet new expectations.
- Realigning skills to address new requirements.
- Addressing internal auditing’s role in assessing risk management.
- Leveraging technology to achieve greater efficiencies.
- Coping with diminished resources.
- Demonstrating value and adding to the bottom line.
- Maintaining stature with the audit committee.
- Developing a continuous focus on risks.
- Maintaining a focus to prevent and detect fraud.
- Implementing the new International Professional Practices Framework.
I have commented on some of these challenges in my blog during recent weeks. In the coming weeks, I hope to address others.
Finally, I thought the most thought-provoking quote of the week came in a keynote presentation by Larry Harrington, chief audit executive of Raytheon. Larry concluded his presentation (“Will We Lead or Become Irrelevant?”) by quoting Peter Drucker: “The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.”
Posted on Aug 26, 2009 by Richard Chambers
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