Risk in Focus 2024: hot topics for internal auditors (ENG)

The current economic uncertainty appears to be a continuation of the crisis state that started with the pandemic. While European economies are fragile, organizations face increased climate-related pressures, major geopolitical uncertainties and ever-evolving cyber risks. In doing so, many organizations have challenges in attracting and retaining talent and the skills needed to deal with the uncertainties. Looking ahead and resilience are critical success factors.

Each year, the European Institutes of Internal Auditors work together to identify key risks for the coming calendar year. The results are intended to help create audit plans for 2024 and give governing bodies a good idea of what challenges to expect in the coming year. 

The results of Risk in Focus 2024 are summarized in five hot topics:

1. Macroeconomic and geopolitical uncertainty: focus on strategic change
2. Cyber and data security: strengthening the digital nervous system
3. Human capital, diversity, talent management and retention: adapting culture 
4. Climate change, biodiversity and environmental sustainability: embrace in the mission
5. Supply chain: strengthen critical partnerships 

Key findings from the report:

• Cyber and data security maintains the number one position as the biggest risk. 84% consider this a top 5 risk for their organization. Logically, then, this is also the risk where internal auditors spend the most time. Earlier this risk was further magnified by the pandemic, now by the rapid developments in Artificial Intelligence (AI).
• Human capital, diversity and talent management continues to rise in importance; 58% of respondents see this as a top 5 risk, up from 50% and 44% respectively in previous years.
• Macroeconomic and geopolitical uncertainties come in third place; 33% even see this as the most important risk for the organization. Influenced by high(er) inflation and interest rates, this affects a wide range of financial and operational areas.
• Climate change is seen as the biggest riser in the coming years and will be the third most important risk by 2027. New reporting requirements must be implemented. Sustainability is not only a matter of regulation, but also of strategic reorientation, it is indicated. 

A Board Briefing is also available this year.