To meet stakeholder needs, internal auditors must sharpen their focus on risk management, governance processes, and enhanced use of audit technology. These are just a few of the findings uncovered by The Institute of Internal Auditors Research Foundation's (IIARF's) 2010 Global Internal Audit Survey, released today from The IIA's General Audit Management Conference in Las Vegas, USA. The study, a component of The IIARF's ongoing Common Body of Knowledge (CBOK) study, analyzed responses from 13,582 practitioners in 22 languages and more than 107 countries. It's the most comprehensive global study ever conducted on the practice of internal auditing.
"This study enables us to document past and present changes and trends in the practice of internal auditing, investigate possible upcoming shifts, and provide practicing internal auditors with ideas and information about best practices," says Yass AlKafaji, associate professor of accounting at the American University of Sharjah in the United Arab Emirates. "Internal auditors need to sharpen their focus on risk management and governance processes, which are projected to become the cornerstones of the internal audit profession."
According to the survey, 80 percent of respondents foresee an increase in their risk management activities, and 23 percent project more corporate governance reviews in the next five years. The study also found that approximately half of participating organizations expect to recruit more staff during the next five years, and the two skills in greatest demand are: (1) understanding the business, and (2) knowledge of risk analysis and control assessment techniques. Moreover, researchers identified a growing need for specialized training in data collection and analysis, operational research, and new audit tools and technologies.
"This data provides an empirical demonstration that organizations are recognizing the harmful impact of inadequate corporate governance and the significant risks it poses to the effectiveness of their risk management function," said Richard Chambers, CIA, CGAP, CCSA, global president and CEO of The Institute of Internal Auditors. "Internal auditors are recognizing these risks and aligning their coverage in response to their stakeholders' changing expectations."
The survey's five-report analysis offers tangible information to help chief audit executives (CAEs) make decisions and plan future initiatives. The first four reports examine:
? Characteristics of an internal audit activity, including demographics, staffing levels, and reporting relationships.
? Important competencies for today's internal auditors as well as compliance with The IIA's Standards.
? Measurement of the value of internal auditing.
? Perceived changes in the roles of the internal audit activity over the next five years.
The fifth report, Imperatives for Change: The IIA's Global Internal Audit Survey in Action, contains overall conclusions and observations from the Global Internal Audit Survey, 10 detailed action items to help CAEs address upcoming imperatives, and an overview of a related survey of internal audit stakeholders in the US. Key imperatives include:
1. Sharpen the focus on risk management and governance.
2. Develop a strategic vision for internal auditing.
3. Monitor and report on internal auditing's value.
4. Strengthen audit committee communications and relationships.
5. View compliance with The IIA's Standards as mandatory, not optional.
About The IIA and The IIA Research Foundation
Celebrating its 70th year, The IIA was founded in 1941. With 170,000 members in 165 countries, The Institute of Internal Auditors (IIA) is an international professional association with global headquarters in Altamonte Springs, Fla., USA. The IIARF was founded in 1976 by The IIA. The IIARF expands knowledge and understanding of internal auditing by providing relevant research and educational products to advance the profession globally.