The ongoing COVID-19 pandemic has created a drain on organizational resources, including in internal audit departments, and unleashed new risks on a global basis. A recent survey finds that internal audit is addressing such challenges by increasing budgets and hiring additional auditors.
The survey, conducted by AuditBoard, a cloud-based platform for audit, risk, and compliance management, finds that twice as many internal audit leaders (36 percent) reported increased budgets in 2021 compared with those seeing declines. And they are using bigger budgets to pursue new hires. Nearly three times as many internal audit functions (29 percent) increased staff as decreased staff (10 percent) this year, largely in response to pandemic-related challenges.
The increase in budgets and hiring are expected to continue into the coming years, the survey “2022 Focus on the Future, Internal Audit Resilience and Readiness in the New Age of Risk” also found. Over the next two years, 52 percent of respondents forecast budget increases and 46 percent expect to expand their teams, with an emphasis on highly sought skills.
The additional hiring, however, isn’t expected to come easy. More than half (51 percent) of internal audit leaders hired remote staff during the past 18 months, while 26 percent saw their team members “poached” by other organizations. Other surveys have indicated that internal audit functions are facing the same hiring problems that other professions and industries are experiencing. The Institute of Internal Auditors’ OnRisk 2022 survey, for example, listed hiring and retaining staff among the top risks for internal audit in the coming year.
“COVID-19 created what is arguably the greatest disruption for organizations as well as for internal auditors, due to their enterprise-wide role,” said Richard F. Chambers, AuditBoard Senior Internal Audit Advisor, who authored the report. “The pandemic heightened risks in virtually every facet of enterprise operations. We’re glad to see that internal auditors have met many of the challenges through transformation and resiliency.”
Top Risks in 2022
The AuditBoard survey also looked at the top risks for next year and the years to come. Not surprisingly, cybersecurity continues to be a daunting risk as organizations grapple with unrelenting attacks, but emerging risks involving the workforce, third-party oversight, regulatory changes, and business continuity are becoming increasingly in focus, the survey finds.
The survey, which polled internal audit leaders across North America, including those at major Fortune 500 companies, also revealed:
- Cybersecurity and data protection are considered top risks by 90 percent of respondents.
- The turn to greater remote operations has brought multiple rewards and increased use of new technologies, but also challenges, especially in the areas of organizational relationships and talent retention.
- The post-pandemic risk landscape is quickly changing, with economic conditions; third-party risks; environmental sustainability concerns; diversity, equity, and inclusion (DEI); and more emerging as critical areas of focus for enterprises over the next few years.
- Analytical and critical thinking and communications rank as the top two “critical skills” needed for effective internal auditing, with greater attention being placed on cybersecurity, data mining, analytics, and business acumen.
- Four out of ten said remote operations weakened some relationships between internal audit and stakeholders within the organization, prompting refinement of communication and assessment strategies.
- More than 80 percent of internal auditors expanded their use of specific technologies to enhance their work, particularly with data extraction/analysis and cloud-based audit management software.
The survey is based on data from 180 respondents in an online survey conducted in the fall of 2021. Most respondents were audit leaders in their organizations, primarily based in North America, respondents representing a diverse group of industries. 