Auditors focusing on operational risks; increasing risk management role

Research by the IIA says priorities and the role of internal audit are changing

WASHINGTON, DC - Internal auditors are increasingly focusing on operational risk, according to a US survey of auditors made by the Institute of Internal Auditors (IIA).

Top of the list of changing priorities was an increased coverage of operational risks listed by 47% of participants. Cost and expense reduction resulting from recession belt tightening was also highlighted by 47% of those surveyed. Counterparty risk was another priority, with 39% saying they had increased coverage of risks related to third parties in financial distress.

"The fact that organisations have been shifting their internal audit resources to cover these emerging risks is certainly good news," says Richard Chambers, president of the IIA. "And it's better news that they'll devote even more resources to these risks in the coming year. This tells us that organisations are becoming keenly aware of the value risk-based internal auditing."

The survey also confirmed the current trend towards an enterprise-wide view of increased integration of the traditional lines of defences - risk management, compliance and internal audit. Increased assessment of risk management effectiveness was flagged by 35% of auditors, with compliance also coming under heightened scrutiny.

The IIA polled 364 internal auditors in the US; 117 of whom worked in financial services; and 34 of whom worked for Fortune 100 companies.