Internal auditors are increasing their attention on strategic risk exposures.
More than one-third of internal auditors plan to focus more attention on risk management effectiveness, according to a recent report by the Institute of Internal Auditors.
Of the 554 polled chief audit executives and other audit managers, 35 percent said they would focus more attention on risk management. That was topped only by information technology (38 percent) and compliance/regulatory issues (36 percent).
"It is very reassuring that [internal audit executives] are heeding the call to up their game," said IIA President and CEO Richard Chambers in the organization's March 2013 report, Time to Seize the Opportunity.
"Audit committees have come to expect, if not flat out demand, that internal audit evaluate the organization's strategic risk exposures as well as provide assurance on overall risk management effectiveness," he said.
According to the survey, about 5 percent of respondents witnessed or experienced attempts to unduly influence audit reports or results, which, Chambers noted, "is a relatively rare phenomenon."
The majority of those subversion attempts come from operations.
Also of concern is audit interference coming from the CEO (6 percent) and the CFO (7 percent).
That finding wouldn't mesh well with the recent guidance by the Federal Reserve to large U.S. banks that their internal auditors should report directly to the CEO.
The report found that 10 percent of chief audit executives reported to the CEO and 6 percent to the CFO. The majority, 73 percent, reported to the audit committee, and 3 percent reported to the full board.
By Anne Freedman
June 1, 2013
Copyright 2013© LRP Publications