Increased regulatory scrutiny, a heightened focus on enterprise risk management (ERM), and widely publicized financial statement frauds have pushed internal and external audit’s roles to rapidly expand. Despite the growing need for corporate governance, companies appear to be losing faith in their internal auditing teams’ ability to keep pace with expectations.
In a recent PricewaterhouseCoopers (PwC) survey of the audit profession, the number of respondents who believe that internal audit adds significant value dropped from 54 percent in 2016 to 44 percent this year—its lowest level in five years. The study cites ongoing compliance burdens and budgetary constraints as two likely culprits for the decline, but the call to action is clear: internal audit departments must take steps to ensure they are viewed as a valuable part of the organization.
The intersection of internal and external audit offers opportunities not only for greater efficiency and effectiveness, but also the value creation that stakeholders are seeking from their internal audit departments. By working more closely with external auditors, internal audit can become more forward-looking and adaptive, provide the organization with greater expertise and stronger risk management capabilities, and serve as a training ground for future leaders.
Read the complete whitepaper The Intersection of Internal and External Audit