A new survey of chief audit executives in the United Kingdom finds that more than one in three organizations has yet to do any Brexit scenario planning, despite the impending deadline for the U.K. to leave the EU.
According
to the Brexit Preparedness Survey, conducted by the Chartered Institute of
Internal Auditors, just over half (53 percent) of respondents say their
organizations have undertaken Brexit scenario planning, but more than one third
of respondents (37 percent) say their companies have still not carried out any
work on understanding the impact Brexit. This is in spite of the fact that 82
percent of respondents say their organization anticipates being affected by the
risks associated with Brexit.
When asked to identify the main difficulties organizations faced in scenario
planning for Brexit 79 percent of respondents cited a lack of clarity from government
on its preferred Brexit deal, 68 percent cited the number of scenarios they would
have to plan for, and 55 percent cited lack of available information. When
respondents were asked whether their organizations had received an appropriate
level of engagement and information from government to assist in preparing for Brexit,
just 15 percent answered “yes.”
“Given
Brexit represents the biggest strategic risk to the U.K.’s future prosperity
since the financial crisis of 2008, it is somewhat concerning that over a third
of organizations are yet to carry out any scenario planning, despite the fact
that 82 percent say they anticipate being affected by Brexit,” said Ian
Peters, chief executive of the Chartered Institute of Internal Auditors.
“We would therefore urge senior management and boards to make sure they are
working closely with their internal audit function to ensure their organization
is adequately managing and mitigating the high level of risk associated with
Brexit,” Peters added. “With just 164 days to go until the U.K. leaves the
EU—deal or no-deal—it is high time organizations got on and made sure they are
prepared.”
Other key findings from the Brexit Preparedness Survey include:
- On a more positive note 75% of organizations have established a Brexit working group, while 25% still have not.
- 59% say Brexit has impacted other key risk areas in their organization.
- When asked what those key risk areas are 69% said regulatory uncertainty, 61% said difficulty in recruitment and 57% said supply chain issues.
- 38% of organizations have not assessed the implications of a no-deal Brexit, 51% have.
- 42% of organizations have not assessed the Chequers agreement, 29% have.
The Chartered Institute of Internal Auditors is a professional association for internal auditors in the United Kingdom and Ireland. 