Internal Audit Predictions for 2023
Internal auditors play a key role in building resilient companies that are better able to manage risk and withstand external shocks. After the turbulence of the last few years, internal audit is very much in the spotlight, and teams around the world face continued challenges in the form of regulatory changes and further geopolitical uncertainty. As internal audit professionals gear up for the year ahead, we predict the key trends in 2023 that are likely to impact this important business function.
Businesses are dealing with multiple threats such as the impact of the war in Ukraine and the aftermath of the covid-19 pandemic, as well as rampant inflation. These challenges should see audit committees undertake thorough reviews of risk management practices to ensure they are as robust as possible. Effective management and preparedness will be key to successfully navigate choppy market conditions.
Internal audit teams are finding it harder to recruit and retain skilled professionals. This situation appears to be compounded by several different factors: older workers have left the workforce early, attitudes towards work have changed, and the pre-existing skills gap hasn’t been addressed. This puts pressure on the existing team to deliver more with fewer resources at their disposal at a time when expectations are rising. Factor in cost-cutting and efficiency savings in response to an impending economic slowdown, and the challenge to audit and compliance teams becomes even more stark. Expect to see increasing levels of specialisation and staff training, along with software implementations to aid resource planning.
Internal auditors will have to find ways to better support strategic initiatives such as cyber security, diversity, and inclusion for example. In order to achieve this, internal audit teams need to align their efforts with broader business priorities. Having the capability to monitor high-level, real-time data looks set to become a powerful tool to achieve this alignment.
The regulatory landscape will look very different this year and internal audit teams need to keep pace with changes that are coming down the track. Environmental, social and governance (ESG) looks set for a major shake-up as financial authorities look to standardise and enhance rules on climate disclosure in the wake of feedback from the general public. Audit committees will need to consider how these changes affect reporting, as well as internal policies and procedures.
Supply chain resilience
The pandemic exposed the fragility of global supply chains and ongoing international tensions have created even more uncertainty. Given the volatility of world trade, internal audit teams will need to monitor the situation carefully, keeping abreast of political changes and any alterations to trading rules and tariffs.
Internal auditors need to adapt to, and keep pace, with a shifting business landscape. A shortage of skilled professionals should see a healthy uptick in salary for those already working in this field. For career changers or recent graduates, internal audit offers a wealth of opportunities as businesses look to recruit and train candidates with the right aptitude and mindset.