Survey Finds Internal Auditors Need to Brush Up Tech Skills
July 26, 2011 (Knight Ridder/Tribune Business News) NEW DELHI -- A recent survey of 71 companies in India, half of them listed, by PricewaterhouseCoopers (PwC) found that internal auditors need to considerably upgrade their skills to keep their jobs and be an integral part of decision making.
More than 50% of the respondents--heads of internal audit, also called chief audit executives--represented multinational companies.
"The key learning is (that) internal auditors need to be more technology-savvy, expand their scope to include (a) diverse set of risks, increasingly use social networking sites as tools and help their companies to adapt to more dynamic and complex situations in order to be relevant in their companies," said Satyavati Berera, leader of internal audit services, India, at PwC.
Internal auditors are meant to offer independent, objective advice to add value and improve operations. They also help evaluate and improve the effectiveness of risk management, control and governance processes.
Internal auditors are the watchdogs of companies and need to "constantly innovate, introspect, integrate and help add tangible values", said Monish Chatrath, partner, consulting and markets leader at consulting firm Mazars. "This is because the companies' appetite for risks are going up and traditional tools for assessing risks are losing their relevance."
The India survey is part of a global one conducted by PwC, Berera said.
The lack of involvement by internal auditors in companies' growth chart can make them redundant, warns the "State of the internal audit profession study".
"The survey reflects that on an average only 6% of an internal auditor's project time is being spent on strategic growth initiatives, which is alarming," Berera said.
The survey, a copy of which has been reviewed by Mint, shows that 53% of participants were not involved in new product or services development; 50% said they were not part of joint ventures and any kind of strategic alliance; 55% said they were not involved with new geographic markets, and 42% said they were not included in mergers and acquisitions (M&As) planned or undertaken by their respective companies.
The survey said internal auditors can help management identify and assess risks relating to M&As and play an important role after deals are consummated by helping managements realize synergies and reduce costs.
The respondents, ranging across technology, retail, pharma, hospitality and non-profit sectors, weren't closely involved in various areas of technology risks.
While 50% said they were not involved in information technology (IT) governance, 60% said they were not involved in IT asset management, 44% said they were not involved with security and privacy of technology risk, and 30% said they were not involved in compliance with regulations through technology.
"The added responsibility of staying ahead of new regulation as it is enacted may challenge internal audit organizations' capacity," the survey said.