75% believe their internal audit function has a positive impact on risk management, but 80% acknowledge room for improvement.
In January 2012, we commissioned Forbes Insights to conduct a global survey about the evolving role of internal audit.
From that research, we learned that 75% of respondents believe strong risk management has a positive impact on long-term earnings performance. An equal number believe their internal audit function has a positive impact on overall risk management efforts.
And yet, 80% of respondents acknowledge that their internal audit function has room for improvement. 70% of these respondents believe that the improvements should be undertaken within the next 24 months.
Our survey further suggests that internal audit will continue to focus on a mix of business and information technology (IT) reviews, with an increased emphasis on strategic and operational risks.
Internal audit risk assessments, regulatory requirements and enterprise risk assessments will remain the top three drivers of the audit plan, mirroring the top two improvement priorities.
Already, internal audit is playing a more prominent role in organizational issues, such as:
- Major capital projects (49%)
- IT systems implementations (42%)
- Mergers and acquisitions (37%)
- Material contracts (32%)
Technology also remains a key area of focus for internal audit functions, comprising 18% of the current audit plan. 48% of respondents suggest that IT security and privacy risk are top priorities.
Companies with more mature risk management practices outperform their peers financially.
There are four steps that internal audit functions can take to realize strategic alignment, increase relevance to the business and help achieve a risk maturity that accelerates stronger financial performance: