According to the results of Protiviti’s 2020 Internal Audit Capabilities and Needs Survey, chief audit executives (CAEs) and internal audit leaders have reported their competency levels in three vital areas – governance, methodology and enabling technology – to be remarkably low. This shows that most internal audit functions are at risk of becoming obsolete for failing to modernize and transform their audit processes against the increasing demands of modern stakeholders.
The Protiviti study, titled “Exploring the Next-Generation of Internal Auditing,” surveyed nearly 780 CAEs and internal audit leaders across the industry to uncover the pressing priorities for internal audit functions when it comes to next-generation auditing skills.
Key findings include:
- Next-generation internal audit competencies need to be prioritized rather than marginalized – especially enabling technologies. CAEs and internal auditors report their competency levels in next-generation governance, methodologies and enabling technologies to be remarkably low at a time when these capabilities should be priority areas for growth and development.
- Fewer internal audit groups are undertaking some form of innovation or transformation, but the maturity of these capabilities has increased. This progress is good news, but it makes it even more imperative for internal audit groups not currently undertaking some form of innovation or transformation to get moving – or risk falling too far behind.
- Audit committees want CAEs to communicate how their transformation and innovation efforts are resulting in more coverage of risks and deeper audit reviews. As internal audit groups advance transformation activities, the audit committee’s interest in these efforts increases, which in turn requires audit leaders to enhance the risk relevance, visual appeal and conciseness of their communications to the board.
- In addition to next-generation internal audit competencies, top audit plan priorities include cyber threats, enterprise risk management, fraud and third-party risks. Particularly, internal audit strategic vision, a core next-generation competency, ranks among the top five audit plan priorities.