Internal audit departments are growing after sharp staffing and budget cuts in 2020 and 2021 in the wake of the Covid-19 pandemic, according to a new survey by the Internal Audit Foundation.
The organization’s annual survey, which this year included responses from nearly 450 internal audit executives and directors, found that chief audit executives (CAEs) were more than twice as likely to have increased their staffing levels than to have cut them over the past year (26% vs. 9%). And by a wide margin, departments are also seeing their budgets bounce back from the pandemic, with 36% saying their budgets are rising compared to 13% who said they’re shrinking.
“In today’s evolving risk environment, it’s crucial for organizations to allocate more resources to their internal audit functions,” said Anthony Pugliese, president and CEO of the Institute of Internal Auditors, the foundation’s parent organization. “Internal audit teams need adequate support to provide objective assurance and help manage risks effectively.”
This year’s report also reinforces the growing acceptance and adoption of artificial intelligence across a swath of corporate functions, including HR, governance and finance teams. In its survey, the organization found that more than 40% of internal audit leaders are actively researching their future use of AI, while 15% are already using it and 11% are auditing the use of AI in their organizations.
Other key findings:
- Internal audit teams place high priority on cybersecurity and IT audits, which combine for nearly 20% of audit plans. That’s compared to operational auditing (17%), compliance (14%) and financial reporting (14%).
- Internal audit functions led by Millennials are more likely to perform some or all of their work outside of the office. Only 17% of Millennial-led functions do most or all of their work in person, compared to 28% of functions led by Generation X and 34% of functions led by Baby Boomers.
- This year’s report revealed more gender parity for executives and directors in younger generations. Among Baby Boomer respondents, 33% were female and 67% were male; among Gen Xers, 48% were female and 52% were male; among Millennials, 50% were female and 50% were male.
