Leaders of the most effective internal audit functions demonstrate five key qualities, according to PwC’s 2016 State of the Internal Audit Profession Study.
Expectations for internal auditors are high. In the survey of more than 1,600 chief audit executives and their stakeholders, 54% of stakeholders said internal audit is contributing significant value, an increase of 6 percentage points from last year.
Sixty-two per cent of stakeholders said they expect even more value from internal audit, including almost half of those who said they already receive significant value.
Perhaps predictably, the survey found a close correlation between strong leadership and internal audit’s ability to add value and deliver high performance.
“To continue fostering internal audit functions to become trusted advisers within their organisations, stakeholders should promote strong internal audit leadership, while audit executives work to elevate the performance and perceptions of their respective functions,” Jason Pett, PwC’s internal audit solutions leader, said in a news release.
The most effective internal audit leaders, according to the PwC report, consistently exhibit five traits:
- Create and follow through on a vision. The most effective internal audit leaders have a vision that aligns with the organisation’s strategic direction and informs their strategic plans, investing in capabilities to support that vision.
- Source and retain the right talent. Mentorship, talent development, and the ability to source the right talent are keys for effective internal audit leaders. Almost three-quarters (73%) of very effective internal audit leaders include co-sourcing as one of their talent strategies.
- Empower the internal audit function. Almost four out of five very effective internal audit leaders are vice presidents or hold senior positions in their organisations. Stakeholders acknowledged in the survey that they have a responsibility to empower the chief audit executive by creating a culture that supports a strong control environment.
- Demonstrate executive presence. The most effective internal audit leaders bring bold perspectives and think broadly about the company.
- Partner with the business in meaningful ways. To be effective leaders, internal auditors must develop relationships built on trust, build partnerships across the lines of defence to co-ordinate risk management across functions, and use those connections to develop an integrated assurance strategy across the organisation.
—Ken Tysiac (email@example.com) is a CGMA Magazine editorial director.