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Mind the gap: internal audit quiz reveals areas of concern

Ellen Davis

18 Oct 2016

Louisville Metro Police block Highway 22 after the road collapsed in Louisville, Kentucky April 3, 2015. Heavy rains of up to seven inches in Louisville areas caused flash flooding that forced more than 160 water rescues and public schools to be cancelled Friday. REUTERS/ John Sommers II - RTR4W1JP
REUTERS/ John Sommers II

Internal audit teams must provide ever more value and insight, but many are doing so with limited technology and the most basic frameworks.

As senior managers and board members demand additional focus in areas such as risk culture and regulatory compliance, the workloads of internal audit teams are increasing — often with fewer resources.

And while significant progress has been made in the adoption of best practice, it is clear from our global survey on the maturity of internal audit departments that there are still major framework holes within many teams.

Download the full infographic — Internal audit departments: how mature are they in reality? 

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The comprehensive self-assessment quiz involved more than 300 internal auditors and showed that between one-quarter and one-third of these teams struggled to evolve within their organization.

Technology gaps

Perhaps the most alarming finding involves the adoption of technology, with 62% of respondents reporting that its use in order to manage the audit process was basic, limited or insufficient.

Another surprising disclosure is that nearly one-quarter of internal audit teams have limited, informal or undocumented internal audit policies and procedures.

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On competency building, some two-fifths of internal audit teams revealed they have only informal coaching, performance evaluations and expectations for all resources.

A further 8% said they have insufficient coaching and evaluation feedback for all resources, while 10% have just an informal internal audit evaluation process.

That’s a total of 57% of respondents whose organizations have a sub-optimal approach to these key human resources functions.

Read the white paper — How mature is internal audit? A real-world analysis

Poor communication

Communication of internal audit activities and value proved another area where teams could improve their approach.

One-quarter of respondents said they only have informal strategies in place to actively communicate the role of their internal audit department within their organization.

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With a further 9% saying they had minimal or no communication strategies in place, a total of more than one-third of internal audit teams have an inadequate approach to communication.

And just over one-quarter do not have an internal audit charter that defines both assurance and advisory activities, and is also approved by their chief audit executive and audit committee.

Software solution

It’s clear from the results of this benchmarking quiz that between one-quarter and one-third of internal audit teams genuinely struggle to evolve within their organization.

In a world where internal audit teams are being asked by senior management and the board to provide more value and insight, the best practice gaps demonstrated in this survey are troubling.

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However, Thomson Reuters can help address these concerns with software that frees internal audit teams from manual tasks — so they can focus more on the aspects of their roles that add value to the business.

Thomson Reuters AutoAudit is used by hundreds of organizations around the globe, helping internal audit teams implement best practices, automate standard audit processes, and provide the analysis that stakeholders value most.

Read the white paper in full — How mature is internal audit? A real-world analysis

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