Internal auditors confident in risk assessment but face possible talent shortage

By Ken Tysiac

Internal auditors in North America are confident in their ability to assess risks on a continual basis, but they face a potential talent shortage in the profession, according to a report released Monday.

The North American Pulse of Internal Audit survey, released by the Institute of Internal Auditors (IIA), measures responses from 311 chief audit executives and others in internal audit management roles. Nearly all of the respondents (91%) were at least moderately confident in their internal audit function’s ability to assess risk on an ongoing basis.

Sixty-one percent of respondents agreed or strongly agreed that internal audit has the resources and expertise to assess risks continuously and analyze their potential impact to the business model. But when survey respondents were asked to give reasons for any skill gaps on their audit teams, 54% cited competition for a limited pool of skilled auditors.

“Internal auditors have a clear mandate to identify and address major risks on a continual basis,” IIA President and CEO Richard Chambers said in the introduction to the report. “They also need to find the talent to do so and allocate their resources in response to those risks.”

Respondents were surveyed in October 2014 for the report, which can be downloaded for free.

The most in-demand skills categories, according to the survey, are:

  • Analytical/critical thinking skills (considered extremely or very essential by 96% of respondents).
  • Communication skills (96% extremely or very essential).
  • Business acumen (80% extremely or very essential).
  • Industry-specific knowledge (69% extremely or very essential).

In the face of emerging risks such as cyberattacks and increased regulation, the survey shows that management appears likely to provide more resources to internal audit in 2015. Nearly 42% of respondents expect their budgets to increase in 2015, and just 9% predict that their budgets will decline. Nearly 3 in 10 respondents (29%) expect their budget to increase by more than 15%.

Meanwhile, 29% of respondents expect their staffing levels to increase, while just 3% project a decrease in staffing.

Ken Tysiac is a JofA editorial director.

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