Risk in Focus helps Heads of Internal Audit to understand how their peers view today’s risk landscape as they prepare their forthcoming audit plans for 2020. Cyber and data security has firmly established itself as a top-of-mind issue for the majority of audit executives. Climate change and the environment is rising up the internal audit agenda.
Formerly a business continuity, financial and reputational concern, cybersecurity has now also taken on a compliance dimension as companies continue to make efforts to stay on the right side of the General Data Protection Regulations (GDPR). Once again, regulatory matters remain a chief concern for a majority of CAEs, who stress the need to remain compliant with antitrust, antibribery and corruption, anti-money laundering laws and sanctions. This coincides with authorities in various jurisdictions, including within Europe, showing a willingness to issue record fines as a deterrent. There is also a persistent concern about the effects of digitalisation, which is of course a clear source of both risk and business opportunity. As established companies face heavy competition and sectors undergo rapid evolution and convergence, CAEs are rightly questioning what digitalisation means for the future of their organisations’ business models. Political uncertainty is showing signs of gaining prominence when compared with the results from 12 months ago. This might be expected since the weaponisation of trade policy for economic and diplomatic ends has never before dominated the news flow like it has in recent months. In this sense, the economy and politics can be viewed through the same lens, each closely impacting upon the other. Perhaps most striking of all, the ECIIA sees that climate change and the environment is rising up the internal audit agenda. While still only seen as a top five risk by a minority of CAEs, there is a notable annual increase in the number of audit executives who say this is front of mind and a significant risk to their organisations. As corporations begin to grasp the nettle on climate change and their impacts on the environment, the ECIIA sees internal audit as a valuable ally to the board and senior management in assessing the management of risks and opportunities related to a topic that defines our times.
Risk in Focus 2020
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