As a result of an reporting error, the original July 9 version of this article incorrectly stated that a statistic in the report indicated that “staffing and future budget allocations for the teams are stagnant.” In fact, no statistic in the report suggested stagnation. CFO.com regrets the error.
Since the business community began demanding more from its internal auditors during the past few years, the profession has gained more respect, says the Institute of Internal Auditors. But, collectively, internal auditors have fallen behind on proving just how effective they are at their jobs.
Few audit teams use the IIA’s Standard 1300, Quality Assurance and Improvement Program, which was designed for chief audit executives to continuously monitor the effectiveness of their teams. Only a third of respondents to a worldwide IIA survey have instituted the program within their companies, and nearly 25 percent have no plans to implement it at all, says a new survey from IIA, that polled 9,300 internal auditors from 91 countries.
For that reason, the IIA may consider providing additional guidance related to the standard and recommend less expensive ways for companies to start conducting assessments of their internal audit function. The IIA’s research arm made the suggestion after collecting preliminary survey results.
The study also found that nearly 40 percent of companies have never had an external quality assessment of their internal audit teams, as required by a new IIA standard that was announced in January and covers internal auditing work dating back to January 1, 2002. To be fair, the survey was conducted last year before the requirement deadline, and 28 percent of the respondents do not yet have to comply.
While the majority of internal auditors skip over IIA’s Standard 1300, they generally follow the association’s other guidelines. Eighty-two percent of the respondents said they are following at least some of the standards. However, only 39 percent are certified in internal auditing.
The IIA, which provides certification and guidance for internal auditors, is planning to analyze those findings along with the other data the association collected last year for its first major study of the profession in eight years. Released on Monday, the preliminary results show that auditors believe that they are valued by their organizations. At the same time, they expect the scope of their work to increase in certain areas that have received more attention following the corporate scandals earlier this decade, particularly risk management and governance.
Indeed, internal auditors are increasingly asked to be more flexible, particularly as globalization continues to spread, business cycles shrink, and regulations change, says Dominique Vincenti, chief advocacy officer of the IIA. Internal auditors are forced to “be in constant professional development mode” to stay on top of the various changes, she adds.
To help internal auditors keep pace with change, the IIA plans to analyze its findings over the next few months and release more comprehensive data from the survey in October. The IIA will also repeat the study every three years to get a better understanding of the profession’s trends. The association last conducted a similar study in 1998.
The data will also be used to update the IIA’s certification test by 2010. Currently, the association is in the process of automating the current version of the test, Vincenti notes. For example, starting in February, testers will no longer use paper and pencil to fill in their answers.
The IIA study also found that chief audit executives and internal auditors consider confidentiality and objectivity as among the top five most important behavior skills for auditors. In addition, the scope of their work has expanded to big-picture issues: Internal auditors are increasingly involved in strategy development (according to 29 percent of the respondents) and training audit committee members (34 percent).