Internal audit offering early stage strategic advice

INTERNAL auditors within financial services firms are being brought in earlier to assess strategic risks, according to the Chartered Institute of Internal Auditors (IIA).

Auditors are being tasked with assessing risks associated with major strategic events such as product launches, investments and mergers and acquisitions, a report by the institute found.

These are among the key findings in a research report, based on a series of interviews with heads of internal audit, which also found that internal audit is now seen by the regulators as a key indicator of the good governance of risk.

“Leading firms appear to be stepping up accordingly,” said Ian Peters, chief executive of the IIA.

The research suggests that the best internal audit teams are seeing the scope of their remit expanding and working practices changing. Leading firms are increasingly bringing internal audit in to advise on the M&A process and other significant strategic events at an early stage.

“As M&A activity picks up after the recession, internal auditors are making an essential contribution to success by helping to stress-test decisions, and ensuring that risks posed by major corporate events are being properly addressed and managed,”

“Internal audit is moving towards taking a “risk-based” approach rather than a cycle-based one…and focussing on outcomes instead of processes.