Internal Audit: A Rebalancing Act


ompliance with Sarbanes-Oxley Act requirements has been the primary focus for most internal auditors for two years. But, according to a survey by Protiviti Inc. ( ), three out of four companies will spend less time on compliance in 2006 and more on risk management.

Even by year two of SOX compliance, companies expected their internal audit departments would not devote as much time to such efforts as they had in year one. Only 7% anticipated spending three-quarters of their time on compliance compared with 38% in the first year, 43% expected the internal audit groups to spend from one-fifth to one-half of their time on such activities in the second year and 24% assumed SOX would take less than one-fifth of departmental time overall in year two.

A number of respondents anticipated some realignment of responsibilities in 2006. Half said the audit committee would likely have an oversight role in their rebalancing efforts. The companies expected many benefits to accrue from these efforts, including more appropriate coverage of risk (30%); reduced costs of section 404 and section 302 compliance (18%); and expansion of internal audit’s ability to perform more traditional audits (18%).


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