31 July 2014

ECIIA: Internal audit developing foresight role

Speaking at the IIA’s International Conference in London in July 2014, he said the profession was operating at the cutting edge of strategy, sustainability, governance and a whole range of other issues. That provided internal auditors with a unique perspective on their organisations, he said, and gave them the ability to think ahead about risk.

“The purview of internal audit has changed. Internal audit is becoming more insightful and can look at how risks are likely to evolve. It is moving into an era of foresight,” he said.

That would present challenges, he said, including having sufficient resources to operate at this enhanced level. But he said boards were increasingly depending on internal audit to provide assurance on those aspects of the business that made its operations sustainable in the longer term. That overarching perspective was changing the way that internal audit was perceived by audit committees, he said.

He said that investors were increasingly interested in integrated reporting because they wanted to make investment decisions that had long-term validity. The recent economic crisis had highlighted the pitfalls of business strategies that failed to consider the broader impact of their activities on society. “Short-term capitalism doesn’t work,” he said. “We need inclusive capitalism, or sustainable capitalism.”

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