Internal Audit (IA) effectiveness and efficiency continue to be a primary concern especially regarding risks and revenue enhancements, while most companies demand a measurable impact from IAs, a new study titled "Seeking Value through Internal Audit" based on the survey of over 400 Chief Financial Officers (CFOs) conducted jointly by KPMG and Forbes. The findings called attention to a gap between what Audit committee (AC) chairs and CFOs want and what they are actually receiving from IA functions in their companies. The survey indicated the following factors as primary concerns in internal audit: Performance of effective and efficient audits (71 percent); measurable impact of IA functions (63 percent); quality of IA reports (52 percent); commitment/technical excellence/quality (44 percent); appropriately qualified professionals (41 percent); and clear standards/robust tools (35 percent). The study noted that 10 percent of respondents agree to a certain degree that their IA functions should adequately identify and respond to their emerging risks, while the majority (85 percent) are neutral on this subject, five percent somewhat disagree, and none strongly agree or disagree. The study also indicated that IA needs to be more proactive in identifying and mitigating risk, not just in assessing the controls already in place. Around 45 percent of the companies surveyed monitor risk through a compliance function, while 26 percent perform this task through their legal function, and only nine percent through an Enterprise-wide Risk (ERM) management. The only thing respondents seem to care about, the study indicated, is how IA responds to emerging risks. As per the ranking of the top five skills that internal auditors should possess, respondents put communication (67 percent) on top of the priority list, followed by tech skills (62 percent), critical thinking/judgment (52 percent), understanding global markets (48 percent) and command of data analytics (39 percent). The study said "currently, 63 percent of companies use data and analytics technology in isolated or specific instances only, or it exists within discrete functions. It is predicted that this figure will drop to 50 percent within the next three years, while the use of enterprise-wide risk focused D&A capabilities will jump from 35 percent to 47 percent." Khalil Al Sedais office managing partner at kpmg in Riyadh and head of audit, said: "Based on the study's results, the expectations IAs are required to live up to continue to grow and evolve. This means that IA functions need to deliver more valuable insights and advise on new ways of gleaning such insights in order to assist their organizations to respond to emerging risks." Khalid Yassin, Head of Risk Consulting Services at KPMG Saudi Arabia, said: "Effective and efficient audits are instrumental in providing valuable insights and helping organizations and businesses assess emerging risks, and even mitigate their impact. By doing so, IAs are undoubtedly adding value to the performance of these organizations and businesses."
