- Forty-three percent of chief audit executives and senior internal audit leaders are concerned with finding qualified candidates as they struggle with a lack of access to the talent they need to conduct the expanding tasks of internal audit, according to Protiviti’s 2023 Next Generation Internal Audit survey.
- Responsibilities for internal auditors include a growing laundry list of items: complete the annual plan; keep up with the evolving risk landscape and the organization’s transformation efforts; hire, train and retain talent; be available to support management requests and provide advisory and consultative services.
- “Just keeping up with these activities is more than many internal audit functions have the capacity to handle so layering transformation efforts and innovations initiatives on top is a legitimate challenge for many,” said Andrew Struthers-Kennedy, global leader of the firm’s Internal Audit and Financial Advisory practice in an email to CFO Dive.
Besides talent concerns, 36% of the 573 surveyed CAEs and directors of auditing cited the rising cost of wages as a top concern today, and 34% noted the challenges of building and maintaining a culture focused on delivering relevance and value amid hybrid and remote working models, the survey said.
With emerging technologies like AI, ChatGPT, financial executives are becoming increasingly aware of the delicate balance between supporting C-suite enthusiasm for AI initiatives while conserving scarce financial resources. Meanwhile, the number of teams relying on AI’s potential is increasing.
“From the perspective of the internal audit profession, I think the main challenge is the traditional accounting background can only address a portion (albeit an important portion) of the technical knowledge and experience needed in a contemporary internal audit function,” wrote Struthers-Kennedy.
Despite technological advances providing the finance function with more potential in terms of improved efficiency, many business executives are concerned over the shortage of workers skilled enough and which are well versed in these new advancements.
“Core and emerging risks in areas such as fraud, cybersecurity, ESG, artificial intelligence, data governance, regulatory frameworks, and compliance make up a large percentage of internal audit annual plans,” wrote Struthers-Kennedy.
In fact, only 31% of respondents are confident that incoming workers have the machine learning and AI knowledge skills that are necessary to evolve the internal audit function — an independent function working closely with the finance function responsible for examining and analyzing company records and financial documents as well as identifying issues like compliance concerns, risks, fraud, and data inaccuracies within a company — the survey said.
“Internal audit leaders need teams with skills and experiences to match and they need to hire from increasingly varied backgrounds as well as train team members in an increasing breadth and depth of skills,” said Struthers-Kennedy.
The labor shortage is a problem sweeping the accounting industry at large, potentially making audit failures more likely, CFO Dive previously reported.
“In a tight labor market, the internal audit function has not been spared in the war for talent, especially with heightening expectations of internal audit functions related to innovation, transformation and other hot topics,” said Struthers-Kennedy.