In the following podcast interview, Anthony DiGiulian, Mike Lawler, and Andy Spencer of SC&H Group discuss the latest risk management challenges keeping Chief Audit Executives up at night, including cybersecurity, Sarbanes-Oxley compliance, the competition for talent, and much more.
The rise of cybersecurity threats, the evolving regulatory environment, the increasing need to audit internal corporate culture, and today’s “War for Talent” are just some of the key challenges that both CAEs and the C-suite face today.
Each of these four risk challenge areas come with a range of considerations that today’s Chief Audit Executives (CAE) should take into account, which are as follows:
Risk Challenge #1: Cybersecurity
The ever-expanding threat landscape is continuing to push cybersecurity into the forefront of any risk management effort. In fact, cybersecurity costs the global economy nearly $450 billion per year, and yet only 10 percent of senior executives in highly vulnerable organizations feel comfortable that they are receiving adequate threat updates.
According to the 2015 IIA Pulse of the Profession Survey, 62 percent of stakeholders expect more value from their Internal Audit (IA) departments regarding cybersecurity issues. 80 percent of Audit Committees want Internal Audit to extend beyond financial reporting and controls, and to provide assurance on escalating IT risks.
Risk Challenge #2: Conflicts of Interest and Fraud
As fraud becomes more prevalent in corporate culture, senior leadership must rely on CAEs to develop strong strategies to mitigate risks. This includes examining prior audit reports and findings to uncover activities that could potentially damage a company’s operations and reputation. Good corporate governance is essential to the prevention of conflicts of interest and fraud.
Risk Challenge #3: SOX Compliance
SOX introduced a highly complex regulatory environment into the U.S. financial market. While SOX is not a new concept, there have been several changes that are impacting how companies comply. As highlighted in a previous SC&H Group Risk Management podcast interview, in the wake of the PCAOB’s recent “Audit Alert #11,” SOX compliance has, once again, reemerged as a key topic. Now more than ever, organizations are running leaner, and looking for increased guidance as a result of these regulatory changes without increasing costs.
Risk Challenge #4: The Competition for Talent
In today’s hyper competitive global economy, the most critical aspect of a business to innovate and grow lies in its ability to attract and retain the right people. According to AccountingWEB’s review of the 2015 IIA Survey, internal audit functions in North America struggle to recruit and retain the top talent needed to meet the increased complexity of today’s regulatory environment. This includes attracting professionals who can assess emerging cybersecurity risks, and put more effective risk-based assurance and advisory services into place.
If you find that any of these challenges are keeping you up at night, please contact Anthony, Mike, and Andy, who can help advise on risk management strategies, here.