The latest news headlines on issues and developments affecting the internal audit profession. Newswire will be on an abbreviated posting schedule this week and next, returning to its regular schedule on Monday, Jan. 4, 2021.
Dec. 21, 2020
A report by global research and advisory firm Gartner details the key risk areas that audit departments around the work anticipate focusing on in the coming year. "The global COVID-19 pandemic has significantly altered the risk landscape," the 2021 Audit Plan Hot Spots report notes. "From major supply chain disruptions and heightened employee health and safety concerns to an economic recession and shifts in consumer behavior, the pandemic has created new risks and magnified perennial concerns. … These risks are increasing concurrently, challenging organizations' capacity to respond." The report highlights 12 risk areas, including supply chain disruptions, business continuity and disaster recovery, third-party management, cybersecurity, and IT and data governance. Additionally, increased automation, the continuing adjustments necessary from employees to adapt to remote work, financial instability, and child care responsibilities resulting from the pandemic are causing employee stress. "Organizations that fail to consider their employees' treatment on a human level face risks of potential litigation, reputational and brand damage, and reduced ability to compete for critical talent," Gartner says.
In a year of challenging headlines, the National Association for Business Economics (NABE) offers some hopeful news: 73% of forecasters say the U.S. economy will return to its pre-pandemic level by late 2021, the Associated Press reports. The NABE Outlook Survey was conducted in November with a panel of 48 professional forecasters. "NABE panelists have become more optimistic, on balance, with nearly one-third revising their outlook higher based on recent news of effective vaccines," said NABE survey chair Holly Wade. A smaller percentage (18%) were slightly more pessimistic, expecting the economy to reach pre-pandemic levels in the first half of 2022, while 10% believe it will occur in the second half of 2022 or later. According to the NABE, "the 73% is a dramatic improvement from the October survey in which 38% of panelists believed that a full recovery would occur before 2022."
The IIA has released new supplemental guidance to support internal auditors in the financial services sector. The Practice Guide, Auditing Market Risk in Financial Institutions, arrives during a time of economic volatility. During such times, regulators and supervisors focus even more intently on the market risk associated with financial instruments. The guide looks at the regulatory landscape and the importance of models that can accurately measure the capital impact of market activities on the financial viability of an institution. Moreover, the guide discusses the expected role of internal auditors in financial institutions, the concepts auditors need to understand, and factors to consider when conducting engagements to assess market risk.
Coinbase, the largest cryptocurrency exchange, has filed for an initial public offering (IPO) in what many believe to be a watershed moment for the industry, International Business Times reports. In a brief announcement, Coinbase said it has submitted its Form S-1 to the U.S. Securities and Exchange Commission for review. The exchange's move comes at a time when prices for cryptocurrencies are soaring. A successful IPO would be a milestone for the industry, which has long been looking for legitimacy. Coinbase is considered the standard-bearer for the industry when it comes to dealing with regulators and traditional financial companies.