Over a quarter (26%) of internal audit functions are experiencing talent and workforce issues. Understandably, some team members may be struggling psychologically with the switch to remote working while others might be less productive because they are juggling work with home schooling or other commitments. Additionally, with areas such as cybersecurity requiring auditors with specialized knowledge, internal audit functions may find they do not possess the right skillsets within their teams to address emerging risks. This reinforces the need to invest in learning and develop a team with diverse backgrounds and skillsets.
Over two-thirds (69%) of respondents indicated that the internal audit budget had not been cut at the time of the survey. This highlights the criticality of internal audit functions and their perceived value to the business. Nevertheless, an extended economic downturn could mean that internal audit functions face additional budget cuts and are forced to do more with less. Thus, functions should consider allocating budget now to enhance the function with the right subject-matter talent, tools and technology so that they are better positioned to withstand potential budget cuts or workforce reductions.
Interactions with the audit committee
The chief audit executives that we surveyed said the number one priority for audit committees in light of the COVID-19 disruption is to reprioritize the audit plan to cover emerging and escalating risks. Understandably, the most common emerging risk cited was employee health and wellbeing, selected by almost half (49%) of respondents. Supply chain and global trade (45%) was close behind, followed by technology and information security (34%) and liquidity and working capital (34%).
Surprisingly, considering the rapidly changing risk landscape, nearly three-quarters of respondents indicated that there had been either no change or a decrease in the frequency of their interactions with the audit committee. So, there is an opportunity for chief audit executives to consider how they can better engage with the audit committee and the board to highlight the unique perspectives and insights that internal audit can bring.