Earlier this month, MISTI released a major survey of internal auditors, the 2017 Internal Audit Planning and Staffing Priorities Report, to look at where internal audit departments are focusing their resources and the skills and competencies they need to fulfill an ambitious agenda.
We recently sat down with Ed Williams, senior manager for risk advisory services at Experis Finance, which assisted on conducting the survey and analyzing the results, to discuss the findings of the report. For Williams, there was plenty of good news in the survey results, along with some areas for improvement.
One of the bright spots, he says, is the finding that 73 percent of respondents say they use a formal risk assessment process as the basis of their audit plan. "The internal audit profession as a whole has made tremendous progress in the past decade as it relates to our ability to better align audit activities with the strategic goals and objectives of the companies we serve," he says.
Still, says Williams, companies need to continue to make inroads on aligning audit plans with what really matters at companies. "One of the top concerns of survey participants is the lack of understanding of IT audit concepts in internal audit. That is definitely an area where a lot of audit shops are struggling to get much better. In this rapidly changing world of technology that we live in, internal audit has to follow suit and keep up with those technology advancements and IT changes. So having really good IT resources within our ranks is critically important," he says.
Another bright spot, according to Williams, is that internal audit budgets are growing at many companies. More than a third of respondents (35 percent) expect the internal audit budget to increase this year, and 57 percent expect them to stay the same. "It means we are doing something right," he says. "I think boards, audit committees, and management really do recognize the value that internal audit can have. It's critical for us to capitalize on this and continue to improve, continue to innovate, and get as efficient as we can. Now is not the time to get complacent; we have to continue demonstrating this value," Williams says.
Internal Audit's Value Proposition
A way that internal audit can demonstrate that value, he says, is by assessing areas that haven't been traditional internal audit topics for internal audit to examine, such as culture or sales and marketing. "For us to get traction in these non-traditional areas, we need to demonstrate to management and the board that we are the right ones for that job," he says. "In some of our audit shops that's a challenge, because we may not necessarily be the expert in some of those areas." Williams says internal audit departments can use programs like guest auditors and outside experts to bring in that expertise.
One of the results that did not surprise Williams is that communication skills and critical thinking ranked at the top of the list of most desired skills for internal auditors. "If we don't communicate well during the audit process, very good audit results can easily be derailed by poor communications," he says. On critical thinking, Williams says it's one of the essential traits of a good internal auditor. "The path in an audit isn't always well defined," he says. "Being able to think critically and creatively is really one of the big keys to success in this profession."
Length: 19 min. 20 sec.
size: 17.7 MB