Executive stakeholders are finding that Internal Audit can, and should, add strategic value in addition to raising compliance standards. It is up to the Internal Auditors to take the initiative and broaden their responsibilities to enhance their strategic value to the organization.
This is the main finding based on a comparison of two separate surveys, each soliciting responses from different sets of companies around the world. The first survey was administered with 405 CFOs and Audit Committee chairmen. The second collected 134 responses from Internal Auditors.
When it comes to strategic planning, less than half of the Internal auditors said they were involved in the strategic planning process, whereas 94 percent of the executive stakeholder respondents said Internal Auditors were involved.
In addition, respondents were asked to describe “an insightful and valuable internal audit”. The Internal Auditors took a more general view, with 85 percent (by far the highest number) saying an internal audit, by definition, examines efficiency and effectiveness. The most prevalent response among executive stakeholders was more specific, with 82 percent saying a valuable audit is one that finds potential revenue enhancement, cost savings and/or smarter capital expenditures. This would suggest that executive stakeholders view “value” in more tangible terms.
In the case of these surveys, there is a consistent disparity in the views of the two groups regarding the strategic role of IA. However, both sides agree that communication talents are important. This is significant: for Internal Auditors to play a more important role, they must become more influential. This contemporary gap can be bridged starting with the following steps: