Internal Audit Staff Hit Hard by Recession

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The staffing level of internal audit departments was hurt badly by the recession, but the worst might be over, according to a new survey.

The Institute of Internal Auditors polled 817 of its members and found that 23 percent of internal audit activities experienced staff reductions during 2009. However, that percentage is projected to drop to 12 percent next year.

Internal audit departments have experienced staff reductions since 2008, with 2009 showing the greatest impact. The cuts didn’t go as deep in Fortune 500 companies — where the average reduction was only 12 percent of the staff, compared to an average cut of 21 percent of the staff in the overall survey population — but the staff reductions were more widespread. Thirty-four percent of the Fortune 500 companies reported reductions in 2009, whereas only 23 percent of the total survey population experienced reductions.

On the bright side, 17 percent of the survey respondents actually increased their internal audit staffing during 2009, while 60 percent maintained their staffing level. That number is projected to trend slightly upward, with 18 percent projecting a staffing increase next year, and 70 percent saying they will maintain the same number of staff.

“Fortune 500 companies reduced their internal audit staff by a lower percentage than did the overall population of internal audit departments we surveyed,” said IIA president and CEO Richard Chambers in a statement. “This may indicate that Fortune 500 companies are looking to their internal audit functions as a source of insight and assurance during the current economic crisis while they right-size their overall workforce.”

Survey respondents also were asked about their use of rotational staff, where internal auditors are hired from business units within the organization for a specified time, after which the employees rotate out of the internal audit department and back into other parts of the company. Thirty-one percent of the respondents indicated they have rotational models in place, but this number jumps to 64 percent among Fortune 500 companies.

Separately, the IIA has established a new “capability framework” for public sector internal auditors intended to address governance concerns for government audits across the world. The framework aims to identify the roles and obligations of public sector internal audit activity, as well as the organization’s responsibility to support optimal internal auditing. For more information, visit

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