Audit Pros Focus on Emerging Risks, Strategy

Reflecting mounting pressures to focus on the strategic and emerging risks facing their parent organizations, hundreds of internal audit functions around the world are including assessments of such risks in their risk assessment processes, according to findings from the 2016 TeamMate Global Audit Technology Survey, released today at the 2016 TeamMate User Forum, being held at the JW Marriott Grande Lakes hotel in Orlando.

TeamMate, part of Wolters Kluwer Tax & Accounting, is the world’s most widely-used internal audit management system, with more than 100,000 auditors at over 2,500 organizations using the solution globally.

“The majority of our nearly 600 survey respondents report that their risk assessment processes include formally assessing the strategic risks of their organizations,” says Mike Gowell, General Manager of TeamMate, part of Wolters Kluwer Tax & Accounting. “What’s more,” Gowell adds, “70% of our 2016 survey respondents say they are either highly or reasonably confident that their internal audit staffs would either identify any major changes in the organization’s strategic risk profile or would be informed of any such changes on a timely basis.”

Another key finding is the growing focus on emerging risks. Already 55% of TeamMate’s 2016 survey respondents report having a formal process to identify, assess and report on emerging risks, and 44% provide their audit committees with a regular report on internal audit’s assessment of emerging risks. More than half of the survey respondents who do not currently include emerging risks in their risk assessments plan to do so within two years.

In another key finding, 55% of TeamMate’s 2016 survey respondents report having a formal process to identify, assess and report on emerging risks, and 44% provide their audit committees with a regular report on internal audit’s assessment of emerging risks. More than half of the survey respondents who do not currently include emerging risks in their risk assessments plan to do so within two years.

TeamMate’s 2016 TeamMate Global Audit Technology Survey, conducted in July and August, focused on three related and interdependent audit processes — risk assessment, audit planning, and reporting on these activities to management and the audit committee. The goal of the survey was to compile useful data on both current and anticipated practices in these key areas, which audit leaders around the world are seeking to fine-tune to better address the dynamic nature of their rapidly changing risk environments. Survey findings will be particularly helpful to board members, audit committee members and internal auditors seeking to develop best practices for their internal audit functions and parent organizations.

Growing focus on continuous risk assessment

Although 57% of TeamMate’s 2016 survey respondents report conducting an annual audit plan with some periodic updates, a significant number (40%) are updating their audit plans either monthly or as audit work is completed. With an eye toward the future, however, 5% of 2016 respondents are already conducting totally rolling audits and another 28% anticipate moving to a rolling audit plan over the next two years. What’s more, nearly half of TeamMate’s 2016 survey respondents indicate that they either assess risk on a continual basis or combine an annual risk assessment with some form of continuous risk assessment. Looking at respondents who currently assess risk on either an annual or periodic basis, 56% expect to move to a more continuous risk process within the next two years.

Other key themes of the 2016 TeamMate Global Audit Technology Survey:

Assessment of external macro risk factors such as systemic, political or macro-economic risks
Enhanced coverage of cyber risks, identified in 2015 CBOK (The IIA’s Common Body of Knowledge) data as the greatest technology-related risk facing internal auditors today
Coordination of risk assessments with other risk-and-control units within an organization

To learn more about this survey, click here.