Tenth annual survey also explores evolution of internal auditing over the past decade
MENLO PARK, Calif., March 2, 2016 /PRNewswire/ -- According to Arriving at Internal Audit's Tipping Point Amid Business Transformation, the 2016 Internal Audit Capabilities and Needs Survey report (www.protiviti.com/IAsurvey) released today by global consulting firm Protiviti, organizations are more likely than ever to evaluate cybersecurity risk as part of their annual audit plans. Nearly three out of four organizations (73 percent) now include cybersecurity risk in their internal audits, a 20 percent increase year-over-year. While there is a clear need among most internal audit groups to strengthen their ability to address cybersecurity risk, the survey found that these capabilities are much stronger for top-performing organizations, particularly those in which the board of directors has a high level of engagement in information security risks.
"Cyberattack threats are significant and continuously evolving in sophistication," said Brian Christensen, executive vice president, global internal audit, Protiviti. "Our survey found that when it comes to cybersecurity and auditing processes, the highest performing organizations have audit committees and boards who actively engage with the internal audit function during the discovery and assessment of these risks. It's still apparent, however, that further work is essential to build out these internal audit capabilities. Companies must take stronger action to set these imperatives into place."
More than 1,300 internal audit professionals, including more than 150 chief audit executives (CAEs), participated in Protiviti's 10th annual survey to assess the top priorities for internal audit functions in the coming year.
Cybersecurity Risk Capabilities and Best Practices
During the past decade, the importance of cybersecurity in internal audit functions has evolved from a simple IT risk to a serious strategic business risk, an issue that now must be addressed regularly by executive management and the board of directors. In fact, 57 percent of companies surveyed have received inquiries from customers, clients and/or insurance providers about the organization's state of cybersecurity.
Protiviti's survey found that there are two critical success factors when establishing and maintaining an effective cybersecurity plan:
1) A high level of engagement by the board of directors in information security risks; and
2) Including the evaluation of cybersecurity risk in the current audit plan.
Companies with at least one of these success factors in place have a stronger risk posture to combat cyber threats. For example, 92 percent of organizations with a high level of board engagement in information security risks have a cybersecurity risk strategy in place, compared to 77 percent of other organizations. Similarly, 83 percent of companies that include cybersecurity risk in the annual audit plan have a cybersecurity risk policy, versus 53 percent that do not include cybersecurity risk in their audit plans.
Ten Years of Internal Audit
Over the past ten years, internal audit professionals have assessed their competency in more than thirty areas of audit process knowledge and general technical knowledge in Protiviti's survey. Areas that continue to surface as top priorities year-over-year include: ISO 27000, data analysis technologies, various areas of auditing IT, technology-enabled auditing and fraud risk management.
As for 2016, technology issues dominated the priority list for internal auditors. The top 10 priorities for internal audit are:
- ISO 2700 (information security)
- Mobile applications
- NIST Cybersecurity Framework
- GTAG 16 – Data Analysis Technologies
- Internet of Things
- Agile Risk and Compliance
- ISO 14000 (environmental management)
- Data Analysis Tools – Statistical Analysis
- Country-Specific ERM Framework
- Big Data/Business Intelligence
"With most of the top priorities identified relating to IT risks, it's clear that auditing IT has never been more important to internal audit functions and to the state of an organization's overall risk profile," added Christensen. "The rapid introduction of new technologies, combined with the growing frequency and magnitude of corporate cybersecurity lapses, is driving internal audit to increase its IT audit capabilities each year. With internal audit now at a tipping point, these top priorities are more important than ever before. If the internal audit function doesn't keep up with the growth and innovation of companies, it will be left behind. The time to act is now."
About the Survey and Resources
Protiviti's 2016 Internal Audit Capabilities and Needs Survey was fielded in December 2015 across the globe and surveyed 1,333 respondents, with the majority from North America. Respondents work in the public, private, government and non-profit sectors and are representative of virtually all industry sectors.
The survey report, along with an infographic highlighting key results, a podcast and a short video, are all available for complimentary download at www.protiviti.com/IAsurvey.
Webinar on March 24
Key findings from the survey will be discussed in a complimentary webinar on March 24 at 9:00 a.m. PDT. Protiviti's Christensen, joined by Protiviti Managing Directors David Brand and Nancy Pechloff and guest speaker Kathleen Swain, VP of internal audit, Horizon BCBS of New Jersey, will discuss the findings and add their insights during this 90-minute webinar. Please register at http://bit.ly/1QqcybG.
About Protiviti Inc.
Protiviti (www.protiviti.com) is a global consulting firm that helps companies solve problems in finance, technology, operations, governance, risk and internal audit, and has served more than 60 percent of Fortune 1000® and 35 percent of Fortune Global 500®companies. Protiviti and its independently owned Member Firms serve clients through a network of more than 70 locations in over 20 countries. The firm also works with smaller, growing companies, including those looking to go public, as well as with government agencies.
Named to the 2015 Fortune 100 Best Companies to Work For® list, Protiviti is a wholly owned subsidiary of Robert Half (NYSE: RHI). Founded in 1948, Robert Half is a member of the S&P 500 index.
Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services.
Editor's note: Infographic (in JPEG and PDF) and photos available upon request.