Post Economic Crisis: Auditors Rebuilding Businesses but Overlooking Risks
A recent survey conducted by PricewaterhouseCoopers indicated a high level of responsibility that internal auditors have on their shoulder to help businesses grow after their massive setbacks during the economic crisis. But alongside their opportunity to support business growth, internal auditors are shown to be overlooking the risks associated with strategies involved.
PwC’s seventh Global State of the Internal Audit Profession survey, conducted annually, showed that the post economic crisis period has given internal auditors the chance to pull up their sleeves together and align their objectives with the priorities of companies that are underway in completely rising from the rubbles of recession.
But this opportunity does not come light, especially with newer regulations from the Financial Reporting Council which recently expressed its intent to propose major changes to improve how firms address going concern and liquidity risks matters.
Brian Brown, principal and Internal Audit Performance Improvement leader at PwC, said that as the economic crisis “has largely passed, the big questions facing CEOs are in growth and the future.”
More than 2,500 executives from more than 50 countries that participated in the survey revealed that internal auditors who view their companies from a wider perspective can largely rebuild their businesses through their involvement in the social media, emerging markets, mergers and acquisitions, cloud computing, and compliance with new regulations.
The survey showed at the same time that internal auditors and CEOs do not meet at a common point when it comes to addressing the risks associated with growth and technology.
CEOs are more focused on newer geographic markets while internal auditors have the least involvement in this area. Moreover, 70 percent of CEOs are keen in investing in IT while only less than 25 percent of internal auditors are planning to conduct audits in cloud computing and social media.
Nonetheless, CEOs and internal auditors show a common view on complying with government regulation as it is one of the top concerns of companies.
Brown said that while business growth is a “good place to be,” internal auditors still face emerging risks in complying with new regulations and audit plans to which they need to offer significant guidance.
Three areas were subsequently identified in the survey as focal points of internal auditors when addressing risks, including strategic growth, information technology, and regulation.
Brown emphasized the need for internal auditors to be on top of business strategies.
Following the economic crisis in 2008, there has been a quick evolution of newer markets and regulatory measures, with which accompanying risks have also greatly changed that, according to Brown, can become “dynamic business function” if properly addressed by internal auditors.