Internal Audit Faces Talent Shortage

A looming talent shortage could undermine the gains of internal audit departments in getting attention from top corporate executives, according to a new report.

The report, from the Institute of Internal Auditors’ Audit Executive Center, is set for release on Sunday, March 8, and discusses the potential shortfalls in recruiting internal auditors, but also presents strategies for finding talent.

The 2015 North American Pulse of Internal Audit survey found that 4 in 10 chief audit executives say attracting and retaining skilled personnel is a high or critical priority in their audit plans. In addition, more than half (54 percent) of respondents indicate skill gaps on their audit teams caused by increased competition for a limited talent pool.

“Business and government face significant challenges to keep pace with a dizzying array of rapidly emerging and evolving risks,” said IIA president and CEO Richard F. Chambers. “The internal audit profession is in an ideal position to help them, but we must have the right talent at our disposal to provide that assistance.”

The Pulse of Internal Audit report, which will be released at an Audit Executive Center forum prior to the IIA’s annual General Audit Management conference in Las Vegas, provides recommendations for assessing team skills and developing a strong talent management strategy.

Internal auditors’ ability to provide the proper assurance and advisory support to their organizations hinges on having the necessary talent and skills, according to the report. New risks, changing technologies and an increasingly global marketplace have changed many of those required skills.

Experience in finance and internal control alone is no longer enough to address an organization’s evolving risk profile, the report noted. That makes it important for chief audit executives to understand what skill sets they have on staff, what skills they lack, and how to attract and retain talent to fill the gap.

Top areas for both hiring difficulties and skills deficiencies are in IT, cybersecurity and privacy, and data mining and analytics, according to the report.

The challenge involves more than just identifying people with the desired skills. The Pulse report found other reasons for the talent shortage, including changes in demands on internal audit (33 percent), insufficient compensation (28 percent); and a lack of training dollars (25 percent).

Most internal audit budgets and staffs are expected to grow or remain the same in 2015, according to the report. Only 9 percent of respondents expect budgets to decrease and only 3 percent expect cuts to staff.