2010 Internal Audit Capabilities and Needs Survey

Facing a global economic slowdown that stubbornly lingers, organizations around the world, in an effort to enhance their competitive advantage, continue to assess their finance, governance, information technology and operational processes to achieve maximum efficiency and cost savings. They also are maintaining close watch of their risks to ensure their organizations are managing and mitigating them effectively. To support their organizations in these endeavors, internal auditing professionals are seeing greater demands on their time and skills to help improve processes while ensuring proper risk management and controls are in place.

It is in this dynamic environment that Protiviti conducted its latest Internal Audit Capabilities and Needs Survey. Participants, including chief audit executives along with internal audit directors, managers and staff, answered more than 100 questions in four categories: General Technical Knowledge, Audit Process Knowledge, Personal Skills and Capabilities, and a new category, Changes to The IIA Standards (added in light of the changes The Institute of Internal Auditors made last year to its International Standards for the Professional Practice of Internal Auditing).

Key survey findings include:

• In the personal skills and capabilities category, the ability to “develop other board committee relationships” is no longer viewed as an area in need of significant improvement, according to executives surveyed. While chief audit executives still rated this area higher than any other in terms of the need for stronger skills, overall responses pushed it out of the top five in 2010. It was the category’s top response in 2008 and 2009.
• Fraud risk and external quality assessments placed in the top three in the new IIA Standards category, demonstrating that both the prevalence and potential of fraudulent conduct by parties inside and outside the organization remain a top priority for management and a primary focus for internal audit.
• Over the last three years, there has been a high degree of consistency among top results in the audit process knowledge category – with CAATs, continuous auditing, data analysis tools (both data manipulation and statistical analysis), and audit IT all appearing in the top five as areas most in need of improvement.
• The demand for experience with ISO 27000, the certification standard for information security developed by the International Organization for Standardization, remains strong. This skill set has been among the top-five areas for improvement since 2008.
• Both IFRS and XBRL, added in 2009 as areas of general technical knowledge, took positions in the top five of the 2009 and 2010 surveys as subjects in which executives would like to gain more knowledge.
• Strategic thinking ranked in the top five “need to improve” areas in the personal skills and capabilities category for the second consecutive year, corresponding to the recent period of global economic recession and indicating the internal auditor’s emerging role as a strategic partner within business.
• Presenting (public speaking) is the top “need to improve” area in the personal skills and capabilities category. A consistent top-five response, it has become in higher demand every year since the study’s inception.