Key priorities for internal audit to help you benchmark best practice across the financial sector
Our industry-led internal audit survey 2024 explores how this evolution is experienced across different firms. The report breaks down the challenges and obstacles facing internal audit teams and explains how they can add value through:
of firms believe themselves to be well-resourced to meet the audit plan for the coming year
believe themselves to be well-equipped to meet the new IIA standards
hadn't undertaken a stakeholder satisfaction survey
While internal audit will vary across the sector, the majority of respondents had coverage of cyber, cloud, fraud, and Consumer Duty. These themes are largely in keeping with current regulatory priorities and industry trends.
had sufficient coverage of cyber security risk
had sufficient coverage of fraud risk
had sufficient coverage of Consumer Duty
had sufficient coverage of cloud risk
The internal audit function must implement a strategy that reflects an understanding of the organisation’s governance, risk management, and control processes.
This doesn't warrant a wholesale upskilling of the internal audit team, but the chief audit executive believes their coverage to be insufficient, they must communicate how they bridge the gap.
Despite many firms identifying AI adoption as a key priority for internal audit, there’s a disconnect between the function’s current capability and its strategy, with potentially negative consequences for the wider business. Bridging that skills gap and providing effective assurance on AI’s safe adoption will be essential to help firms meet their broader strategic goals.
of respondents have AI skills in their team
believe their coverage of the risk posed by AI is sufficient
Aren't yet using AI in audit engagements
Three of the top challenges for managing the internal audit function are closely related: technology and AI, specialist recruitment, and cost management. Technology and AI was a top-five challenge for the majority of respondents, so this is likely to be a key focus area for many firms over the next few years.
Of respondents listed technology and AI as one of their top five challenges
It’s important to assess skills gaps in terms of the individual business activities, risk profile and risk appetite. The relative importance placed on them will be up to the individual organisation and will inform the approach taken to address them.
Our survey shows almost universal credibility for the internal audit function in their firms, with a seat at the board table offering the best opportunity to realise its future value. However, there’s still room for improvement around the established governance structure and lines of communication.
Under the revised IIA standards, which puts greater emphasis on building relationships and communicating with key stakeholders, we expect this to become more common. The same is true for the head of audit’s meetings with the regulator, which are currently annual for most firms, but which may become more frequent over time.
of respondents hadn’t carried out a self-assessment in more than two years.
This, coupled with the lack of regular external quality assessments for over a third of respondents, leaves a significant gap in performance monitoring. Firms will need to bridge this to comply with the new IIA standards and to identify the shortfalls in their coverage of evolving risks.
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A thematic review across new and emerging risks on the regulatory horizon that’s applicable across financial services.
