Risk in Focus 2022 – Hot topics for internal auditors.
Topics you should be considering in your 2022 annual plan
The Chartered Institute of Internal Auditors this month dropped their ‘Risk in Focus 2020’ report. The report compiles the results of interviews with 50 Chief Audit Executives (CAE)’s from across 13 European countries. Furthermore, it draws upon the responses from the 738 survey’s which the institute received. In a nutshell, the report has some solid contributors, meaning, if its ranked in the top 10 areas which is concerning other CAE’s, chances are you should be thinking about it too.
Now, I would be lying if I said I didn’t get excited about this report every year. Firstly, it gives a guide as to how relevant or risk appropriate our plan is. Whilst not everything in the top 10 may not be applicable to your own business or clients, it’s nonetheless a guide as to what we should be considering or focusing on. Secondly, its when everyone else starts to bring out their own audit priorities. Shortly, we should see each of the Big 4 drop their own equivalents, and this can be a great asset when conducting annual planning for next year.
From a personal perspective, I didn’t find there to be too many surprises with what made it into the top 10. Items such as sustainability and climate change, are all very much expected. With an increasing focus from the general public on climate change, and regulators and Governments looking to increase the amount of legislation and reporting requirements over climate impacts and sustainability reporting; its no surprise that this has featured as a top risk amongst other CAE’s.
Similarly, workforce fatigue, pandemic response and Covid-19 threat, are not a surprise, As Covid continues to impact businesses and Governments impose rules to combat a regularly evolving situation, it should be expected that these topics made an appearance in this years Risk in Focus report. The three Covid related topics really do cover the key areas; lessons learnt from the pandemic, return to work challenges, and dealing with an unpredictable future.
My biggest take away from this report however, is ensuring audit functions are equipped with the right teams and resources. Whilst audit functions can always utilise the co-sourced model, whereby specialist skills, typically from the Big 4, are leveraged to support the inhouse audit teams, care should be taken by CAE’s to not become dependent or complacent and instead invest in their own team. There is great benefit in embedding audit team members with outsourced members as this helps their understanding and ensures those from external are well aware of the business, how it operates, and its risk tolerance. Failure to work collaboratively, openly and transparently with the co sourced provider can result in significant knowledge gaps throughout the audit process.
Once again, the IIA has compiled a document which is extremely current, relevant, and fit for purpose. The inclusion of the ‘Questions for internal audit’ is extremely valuable and something that should be leveraged throughout the annual planning processes, or during specific audits.
The full report can be accessed by clicking here or on the report image.
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