2023 Internal Audit Hot Topic and Focus Areas..

We have searched across the web; through each of the Big 4’s websites, through the IIA, and across thought leadership sites to find out what they all consider to be the top risk / focus areas for Internal Audit going into 2023.

Each year, these risk in focus / hot topics reports can prove to be an invaluable resource for many audit functions and show many upcoming or potential risks which Chief Audit Executives (CAE’s) and Audit Committees should be considering. You can see prior year hot topics, by reading the following posts:

• 2023 Hot Topics and Focus Areas
• 2022 Hot Topics and Focus Areas
• 2021 Hot Topics and Focus Areas
• 2020 Hot Topics and Focus Areas

In this post, we will show you what the IIA, PwC, Deloitte, Protiviti and Gartner all consider to be the main focus areas for 2024.

Institute of Internal Auditors (The IIA)

The Institute of Internal Auditors released their Risk in Focus 2024 report back in September 2023. Following a survey amongst a number of Heads of Audit, the report identifies the following top 15 categories which are on people’s minds going into 2024:

• Business continuity
• Climate change
• Geopolitical uncertainty
• Communications/reputation
• Governance/corporate reporting
• Cybersecurity
• Health and safety
• Digital disruption
• Human capital
• Financial liquidity
• Fraud
• Market changes
• Mergers and acquisitions
• Organizational culture
• Regulatory Change
• Supply chain and outsourcing

You can view the full risk 2024 Risk in Focus Report here.

Deloitte

Deloitte has set out a list of planning priorities for Financial Services Internal Audit for 2024. Their website includes an interactive diagram which highlights both risk areas, but also improvement or focus areas specific to the internal audit team. The diagram is also a neat tool which could be presented to your audit committee and show which topics you have already covered (or plan to cover) through your audit work.

Deloitte has identified the following hot topics Internal Audit in Financial Services:

Regulatory

• Fraud Risk Management
• Anti Money Laundering
• Financial Crime
• Outsourcing and critical third-parties

Finance and Credit

• Model risk management
• Credit risk

ESG

• Sustainability Reporting
• Governance, diversity and inclusion
• Foundations of internal control
• Sustainable financial products

IT and change

• Cyber security – enterprise recovery
• Digital transformation and change
• Generative AI: Recent developments in risk management and regulation
• Change assurance

Innovation

• Digitalisation of internal audit
• Leading with agility
• Setting internal audit’s vision and strategy
• Methodology and practice considerations as you move towards the new IPPF
• Skills of the future

You can view the Deloitte 2024 perspectives here.

Protiviti

Protiviti has released their Executive Perspectives on Top Risks for 2024 and 2034.

Top 10 Risks in 2024:

• Economic conditions, including inflationary pressures
• Ability to attract, develop and retain top talent, manage shifts in labour expectations, and address succession challenges
• Cyber threats
• Third-party risks
• Heightened regulatory changes and scrutiny
• Adoption of digital technologies requiring new skills in short supply
• Existing operations and legacy IT infrastructure unable to meet performance expectations as well as “born digital” competitors
• Change in current interest rate environment
• Increases in labour costs
• Ensuring privacy and compliance with growing identity protection expectations

Top 10 Risks in 2034

• Cyber threats
• Ability to attract, develop and retain top talent, manage shifts in labour expectations, and address succession challenges
• Adoption of digital technologies requiring new skills in short supply
• Rapid speed of disruptive innovations enabled by new and emerging technologies and/or other market forces
• Heightened regulatory changes and scrutiny
• Third-party risks
• Economic conditions, including inflationary pressures
• Existing operations and legacy IT infrastructure unable to meet performance expectations as well as “born digital” competitors
• Increases in labour costs
• Inability to utilise rigorous data analytics to achieve market intelligence and increase productivity and efficiency

You can view the Protiviti risks here.

Gartner

Gartner has released their 2024 Audit Plan Hot Spots report, listing the following hot spots audit teams and audit committee’s alike should be considering for their 2024 annual plan:

• Cybersecurity Vulnerabilities
• IT Governance
• Regulatory Complexity
• Digital Transformation
• Organisational Resilience
• Third Parties
• Supply Chain
• Employee Wellbeing and Satisfaction
• Environmental, Social and Governance (ESG)
• Generative AI
• Macroeconomic Uncertainty

The Gartner Hot Spots report can be viewed here.

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