A new study from PricewaterhouseCoopers finds that a majority of audit leaders at Fortune 500 companies expect the economic downturn to further squeeze budgets.
According to PricewaterhouseCoopers’ 2009 State of the Internal Audit Profession, 49 percent of respondents expect budgets to remain flat and 36 percent expect a decrease in the coming year. In addition, 51 percent of Fortune 500 survey respondents believe that there is a medium-to-high risk of the economic downturn causing an unexpected reduction in the internal audit budget during 2009. That said, the expected reduction in budget is sure to present additional challenges to internal audit departments.
New risks facing today’s companies are increased due to less experienced company staff. Global organizations face the toughest risk environment and must change the risk profile of their company to meet the needs of stakeholders.
“Business and operational risk categories are the areas of highest risk, however internal audit departments are not focusing on these issues,” said Peggy Hardek, co-author of the study and internal audit services partner with PwC. “Determining the composition of auditing activities is certainly one of the most significant challenges internal auditors will face.”
The study also found:
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ERP Implementations highlight a skills gap –Internal audit needs to get up to speed in ERP systems and data analytics.
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When governance meets continuous improvement – Internal audit is presented with performance measurement and customer-centric feedback.
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New strategies for success in a time of transition – Drivers of internal audit success have changed in response to dramatically changing business conditions.