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March 20, 2012

Internal auditors need greater risk management role: PwC study

Stakeholders are demanding increased internal audit involvement in risk identification and management, a PwC US survey of audit stakeholders has found.

PwC’s 2012 State of the Internal Audit Profession surveyed about 1,530 internal auditors and audit stakeholders, such as chief executives and audit committee directors, across 16 industry sectors from 64 countries.

It shows the role of internal auditors is critical to effective risk management, which has been a topical area in recent years due to the global financial crisis.

About half of the respondents asked for added capabilities in the area of data privacy and security, and 32% would like internal auditors to become more involved in understanding and managing regulations and government policies.

Forty-five percent of respondents felt their organisation does not create their audit plans using a robust, top-down risk assessment approach.

“As the risk landscape continues to evolve, the majority of business leaders surveyed said they are not comfortable with how their risks are being managed, although 74 percent of those surveyed have formal enterprise risk management processes,” PwC US risk assurance practice Dean Simone said.

“To deliver what stakeholders want, the standard for an effective internal audit function has been raised and internal audit needs to elevate its performance to meet the always increasing stakeholder expectations.”

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