Wednesday, July 28, 2021

Giving internal audit credibility and bandwidth to keep pace with rising expectations

Pricewaterhouse Coopers (PWC) South Africa (SA) Internal Audit Competency Lead Partner Gerhard Geldenhuys has encouraged local counterparts to read the Group’s in-house research papers to reach new professional heights and increase the value they bring to their organisations.

Geldenhuys who was guest presenter at the Institute of Internal Auditors Botswana (IIAB) 2014 Symposium held on February 21 in Gaborone said in passing that Aircel Limited Audit Committee Chair Vali Nijhawan’s research paper published in Group 2013 State of Internal Audit Profession Study not only created business opportunities but also breathed life into Internal Audit (IA) practice regionally and internationally.

Geldenhuys said, for instance, Nijhawan’s reference to high-performing Internal Audit functions (HPIAF) is an embodiment of benchmarks on exploiting organisational opportunities bridging the gap between what stakeholders want and internal auditor wish to deliver.

This is because HPIAF exhibit stronger performance on eight core attributes delivering distinctly different service levels entrapping inbuilt prominence, Nijhawan said.

According to the India-based Nijhawan who is also director registered with Indian Ministry of Corporate Affairs, “The IA professional environment will remain challenging and incumbents should come out of the compliance mode, showcase strength, ask management probing questions and seek answers. In our research in the sub-region where PCW has a visible presence including Botswana, we identified a subset of organizations represented by 5% of the respondent base as high performing. In the sense that they manage risks extremely well and have IA functions delivering significant value.”
Paraphrasing Nijhawan Geldenhuys concurred that HPIAF stood out neck, head and shoulders from the services other providers offered, risks they address and capabilities enabling strong performance.

HPIAF set themselves apart in four important areas which include stronger functional capabilities taking incremental steps towards the value chain. “Getting the fundamentals right gives IA the credibility and bandwidth to keep pace with greater risk landscape and rising stakeholder expectations,” writes Nijhawan.

The audit functions have a far greater level of integration with enterprise risk management (ERM) and other risk factors by a 25-point risk margin, helping IA viewing problems sooner as they engage in emerging risks as they engage in adding value throughout.

“Our survey found notable differences between risks emergence coverage and other types of IA in how they were extensively involved in other risks such as cyber security, environmental regulations and industry-specific equivalents,” says Nijhawan.

At the higher end of the service spectrum, HPIAF goes beyond validating through providing proactive advice and actively engaging in traditional areas. This is done through using deeper skills, analytics, stronger alignment and a more informed perspective on risk.

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