Greetings from San Diego, where The IIA's aptly titled conference, "Internal Audit Solutions for Tough Times," is wrapping up. It has been a great event with some very thought-provoking discussions on how the global economic crisis is impacting our profession. In a pre-conference survey of U.S. internal audit practitioners, we learned:
- 74 percent of internal audit functions experienced flat or declining budgets in 2009.
- Almost one-third experienced outright reductions over the past 12 months.
- The outlook for 2010 does not look much better with 80 percent anticipating flat or declining budgets.
- 57 percent have increased coverage of operational risks in the past year.
- 49 percent have increased coverage of cost/expense reduction or containment for their companies.
- 51 percent have increased coverage of company exposure to third parties in financial distress.
- In 2010, respondents expect to dramatically increase coverage of operational risks, financial risks, compliance risks, and the overall effectiveness of risk management.
With their operating environments evolving rapidly, internal auditors face a number of key challenges in 2010. In a keynote address on August 25, I outlined the 10 most significant challenges that I think internal auditors will face during the coming year: