According to a new study of more than 1,600 chief audit executives (CAEs), senior management and board members released by professional services specialist PwC yesterday, internal audit functions that have very effective leadership perform better and add greater value to their businesses.
PwC's 2016 State of the Internal Audit Profession study found that more than half of participating stakeholders now believe internal audit is contributing significant value to the business. That's up six points from PwC's 2015 study. PwC also found that 62 percent of stakeholders expect more value from internal audit, and 55 percent expect internal audit to be a more proactive, trusted advisor within the next five years.
"We're seeing a close correlation between strong leadership and internal audit's ability to add value and deliver high performance," Jason Pett, PwC's Internal Audit Solutions leader, said in a statement Tuesday. "To continue fostering internal audit functions to become more trusted advisors within their organizations, stakeholders should promote strong internal audit leadership while audit executives work to elevate the performance and perceptions of their respective functions."
PwC identified five characteristics consistently exhibited by the most effective internal audit leaders that all CAEs should adopt:
PwC notes that some very effective internal audit leaders have taken to renaming the internal audit function (e.g., to audit services) to rebrand it as a collaborative functions that partners with the business.
"It's through close alignment with various stakeholders and owning internal audit's role as a leadership function within the organization that can allow internal audit to help their companies keep up with the changing business and risk landscape," Pett said. "But all this can't be said and done without a clear vision, supported by a strategic plan and enabled with top talent.