Boards, audit committees and senior management now want internal audit to take on a bigger and more strategic role in helping companies manage an increasing array of business risks, according to PwC’s 2012 State of the Internal Audit Profession study. The survey polled 1,530 executives from 16 industries in 64 countries.
“The survey shows the trend has changed from just a few years ago, when internal audit was limited to the finance and compliance function,” says Jason Pett, internal audit services leader for PwC. “At the end of the day, the work of internal audit is with key risks to the business. Internal audit needs to be aligned with the business to make sure it is allocating time and effort to the high-risk areas.”
Risk areas that respondents said receive too little attention from internal audit include: talent and labor (33%), competition (32%), new product introductions (31%), mergers and acquisitions and joint ventures (29%), commercial market shifts (25%) and large program risk (25%).
“One hundred percent of stakeholders and CAEs say internal audit needs to spend more time, not less, on business risks,” Pett says. “What successful companies are doing is inviting internal audit to participate early on in strategic discussions on where the business is moving,”