2011 State of the Internal Audit Profession Study - PwC

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In a departure from previous years, several leading internal audit practitioners from across a range of industries were interviewed to get a sense of the practical steps they are taking to increase their relevance in this changing environment. In summary, these are the actions most often heard from internal audit functions facing challenging times: • Recruiting audit leaders from the business • Sourcing externally for missing capabilities • Enhancing training and development programs to improve the softer skills • Continually improving executive and audit committee reports to provide better context and insight • Maintaining close working relationships with the audit committee chair • Participating in discussions about major growth, cost, and compliance initiatives • Engaging legal and compliance expertise to address the complex array of global compliance risks • Partnering with internal and external technology specialists to address rapidly changing technical and business risks In our view, it’s imperative for internal auditors to look closely at how their own organizations are structured. They should also take a hard look at their agendas for the coming year and think about how practices can be implemented to help embrace change. Leading internal audit functions look beyond the confines of their department and seek partners both within and outside the business. Whether a function of 100 or more auditors, or a much smaller shop, audit teams of every size can benefit from some form of co-sourcing and an active interaction with the business and compliance functions to identify and manage significant risks. That’s our most significant takeaway from speaking with leaders in the profession. 24 Lights, camera, action… Scripting internal audit for a changed world
Questions to ask about internal audit Chief audit executive Executive management Audit committee Relevance and value • Have I engaged and worked with management and the audit committee to frame expectations? • Have I taken action to adjust capabilities and approaches to today’s business environment? • Do I really have a seat at the table? If I don’t, what would it take to get one? • Is the cost versus value of my internal audit department appropriate? • Do I look to internal audit to sort through the toughest issues and initiatives? • Do I view internal audit as an integral part of my executive leadership team? • Do we have relevant performance criteria and expectations that are commensurate with relevant peers? • Does internal audit have a clear point of view about risk and the control environment? • Is internal audit forward looking when it comes to risk? • Have we defined clear performance expectations and compensation criteria for internal audit? Business alignment • Am I leveraging my unique vantage point within the company to provide a clear point of view on the risks associated with the changing business environment? • Do I have the capabilities to provide relevant insight and advice to stakeholder groups? • Am I taking steps to prepare my people for what they will be doing two to three years from now? • Of my top 10 risks and issues, how many is internal audit actively involved in? • Do I view internal audit as an enabler in executing our business strategy? • Am I leveraging internal audit for talent development? • How is internal audit providing a clear point of view on our top 10 critical risks and issues? • Is internal audit providing insight into emerging risks and trends? Client service culture • Am I continually improving the content and format of executive reports? • Do my training plans include improving business acumen and leadership skills? • Am I focused on systematically building relationships? • Am I getting pragmatic business insights and advice from internal audit? • Are we, as a company, committed to internal audit excellence? • Do I trust internal audit to make the really tough calls? • Is internal audit making a concerted effort to engage me? • Are audit committee reports relevant, concise, and insightful? 25
Page 1: Lights, camera, action... scripting
Page 4 and 5: The heart of the matter Growth and
Page 6 and 7: An in-depth discussion Scripting in
Page 8 and 9: “Internal audit must concentrate
Page 10 and 11: Merger and acquisition activity Ino
Page 12 and 13: discussions with CAEs also indicate
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Page 16 and 17: Meanwhile, despite a slowly recover
Page 18 and 19: As such, these softer skills are vi
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Page 22 and 23: How does internal audit overcome th
Page 24 and 25: What this means for your business T
Page 28: www.pwc.com To have a deeper conver

2011 State of the Internal Audit Profession Study - PwC

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