Auditors Placing Higher Priority on Compliance Risks According to Pulse of Profession Survey
(Targeted News Service Via Acquire Media NewsEdge) ALTAMONTE SPRINGS, Fla., Oct. 25 -- The Institute of Internal Auditors issued the following news release:
Internal audit departments are expecting a greater focus on compliance risks and less emphasis on Sarbanes-Oxley according to the latest Pulse of the Profession (https://na.theiia.org/services/Pages/Pulse-of-the-Profession-Study.aspx) survey, a semi-annual assessment of the state of the internal audit profession in North America, released today by The Institute of Internal Auditors (https://na.theiia.org/Pages/IIAHome.aspx) (The IIA's) Audit Executive Center (https://na.theiia.org/services/cae-resources/aec/pages/the-audit-executive-center.aspx). The report - "Defining Our Role in a Changing Landscape" - details how internal auditors foresee risks of the U.S. Patient Protection and Affordable Care Act and preparation for the COSO 2013 Internal Control-Framework Implementation in the coming year.
"We are seeing a stronger trend toward internal audit focusing on areas other than financial controls," said Richard Chambers (https://na.theiia.org/about-us/Public%20Documents/Chambers%20Bio.pdf), President and Chief Executive Officer of The IIA. "Risks themselves are diversifying and are not concentrated in one single area as there may have been in years past."
Among respondents, operational audits make up the largest type of 2014 audit coverage (27 percent), and compliance audits the second type (15 percent). General financial, SOX, and IT audits each represent 11 percent of audit coverage. Additionally, respondents indicate that compliance is among the top five risks for both the audit committee and executive management.
According to The IIA, with many of the requirements of the U.S. Affordable Care Act coming into effect, health care is an area where internal audit may see an increased focus on compliance in 2014.
"One of the greatest opportunities facing the profession this coming year relates to the U.S. Affordable Care Act. To take advantage of this opportunity, internal audit cannot assume a reactive posture. This regulation challenges internal audit to become a visionary, proactive function in their organization," said Chambers.
As noted in the report, a potential expectation gap is emerging related to internal audit's ability to help stakeholders understand the risks associated with the U.S. Affordable Care Act coming into effect and their organization's preparedness to mitigate those risks:
* When it comes to the impact on their organization and internal audit, 22 percent of respondents are unsure whether the 2014 requirements of the U.S. Affordable Care Act will affect their organization and 18 percent are unsure of the impact on their internal audit department.
* Among the participants who note that the U.S. Affordable Care Act would apply to their organization, 38 percent rate themselves as not very knowledgeable of the Act.
* For those respondents that the legislation apply to, 17 percent agreed that their organization will likely act to mitigate its risks by reducing or dropping health care benefits in the next one to three years.
"Today's legislative headlines are likely to become tomorrow's compliance risks," added Chambers. "Being cognizant of the effects of regulatory activity allows internal audit to demonstrate foresight when it comes to compliance risk."
Survey results regarding COSO 2013 implementation indicate that internal audit departments that are implementing the revised framework by Dec. 2014 anticipate an easy transition. More respondents are looking to adopt or transition to COSO 2013 (87 percent) than previously used the 1992 COSO framework (73 percent).
Additionally, the Pulse of the Profession shows the outlook for internal audit resources in 2014 remains strong with resource levels stabilizing close to pre-recession levels. Thirty-six percent of all respondents indicated that their budgets will increase in 2014 and 54 percent stated budgets will remain stable next year. Twenty-five percent of survey participants expect staff levels to increase in 2014 and 72 percent expect them to remain stable, while only 4 percent expect staff levels to decrease next year -- a more positive outlook than what had been expected in 2013.
"Over the years, the internal audit profession has adapted to the challenges of an ever-changing business environment and looking toward 2014, we are well positioned as a profession to tackle the obstacles before us," concluded Chambers. "There are still a lot of drivers asleep at the wheel and the time is now to get up to speed as real risks manifest themselves."
To download a copy of The IIA's Audit Executive Center's report, "The Pulse of Profession 2013: Defining Our Role in a Changing Landscape," visit The IIA Audit Executive Center's website (https://na.theiia.org/services/Pages/Pulse-of-the-Profession-Study.aspx).
(c) 2013 Targeted News Service
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