More than two years after the Brexit referendum, the UK will be leaving the European Union on 29 March 2019. Due to its complicated nature, Brexit has the potential to be a major disruptor to business as more than 40 years of EU-wide market integration is overturned.
The impact has the potential to affect businesses significantly; and future arrangements for regulation and cross-border trade post-Brexit are high on many corporate agendas. Organisations should assess these risks and investigate different options to mitigate them. This is where internal audit can provide independent assurance on the organisation’s Brexit preparedness.
The case studies, which form the core of this report, feature six companies from a variety of sectors who have shared with us how their organisations have prepared for Brexit and provide some examples of best practice. Some have opened new subsidiaries in other European countries to ensure they are able to serve their customers post-Brexit; others are looking into sourcing alternative suppliers; while some are assessing what this means for their EU-born workforce.
In addition, we also surveyed heads of internal audit in the UK and asked them what active steps their organisations have taken to prepare and what the role of their internal audit function has been.
The report shows us that although many organisations have prepared adequately for Brexit, over one-third of the surveyed organisations do not appear to be as prepared as they should be. However, it is not too late.
We encourage internal auditors to continue in their efforts to enhance the role of internal audit in their organisation’s Brexit preparations, and we hope that this report will help them on that path.