The internal audit profession faces stiff competition for talent, especially talent capable of addressing a broadening array of risks and well-versed in emerging technologies that can drive the function into the future, according to a recent survey.
Protiviti’s 2023 Next-Generation Internal Audit Survey found that 43 percent of chief audit executives (CAEs) and senior internal audit leaders report a lack of access to the talent they need. The findings also reveal that internal audit leaders view the ability to recruit qualified candidates and retain talent as their top priorities for the year ahead.
“In a tight labor market, the internal audit function has not been spared in the war for talent, especially with heightening expectations of internal audit functions related to innovation, transformation and other hot topics,” said Andrew Struthers-Kennedy, global leader of Protiviti’s Internal Audit and Financial Advisory practice. “This talent shortage comes as internal audit is expected to take on a greater role in helping companies navigate choppy waters created by changing risks, emerging regulations and shifts in business priorities.”
The Tech Skills Gap
The Protiviti survey identified that the biggest talent shortages are in high interest areas of machine learning and artificial intelligence, with only 31 percent of CAEs and directors of auditing citing confidence that they have access to people with the necessary talent and skills. A majority of the organizations surveyed feel they lack necessary talent in assurance, dynamic risk assessment, continuous monitoring, and process mining. The rapid and continued pursuit of data and technology enablement, across all industries and organization types, has intensified competition for technology-capable talent along with the need to upskill or retrain internal auditors. In some cases, internal audit is often a tech laggard when it comes to adopting new technologies.
“The gaps in internal audit talent and technology maturity are closely related. Difficulties in recruiting and retaining people with technology skills are impeding the internal audit function’s ability to innovate and deliver greater value to its stakeholders,” said Angelo Poulikakos, a managing director at Protiviti. “Working through these challenges requires creativity, commitment, persistence and widespread support, and, in turn, will fortify the internal audit function’s relevance in the eyes of the board, the C-suite and the rest of the business.”
The High Cost of Talent
Aside from recruiting, upskilling, and retaining talent, 36 percent of surveyed CAEs and directors of auditing noted the rising cost of wages as a top concern for the internal audit organization today, and 34 percent noted the challenges of building and maintaining a culture focused on delivering relevance and value amid hybrid and remote working models.
Among survey respondents, training and developing staff is the most-cited strategy for securing talent and skills. There is a disconnect, however, as the organizations reporting the highest levels of next-generation internal audit maturity have pursued alternative strategies to secure access to talent, including co-sourcing arrangements and rotational and guest auditor programs, as a critical supplement to hiring and training activities.
“It’s vital that audit leaders develop strategies to attract, retain and train qualified people while keeping their foot on the gas when it comes to evolving their function and maximizing their relevance for the future,” said Struthers-Kennedy.
Within many internal audit organizations, the use of co-sourcing is increasing in an effort to access external resources and enhance the internal team. This is especially true for difficult-to-find technology skill sets.
The Protiviti benchmarking survey polled 573 executives in November and December 2022, including CAEs, audit directors and managers across industries globally. More than 60 percent of respondents’ companies have revenues of $1 billion or more. 
Joseph McCafferty is editor & publisher of Internal Audit 360°