© 2014 Grant Thornton LLP. All rights reserved.
Strategically
leveraging
compliance activities
2014 CAE SURVEY RESULTS
© 2014 Grant Thornton LLP. All rights reserved. 2
Grant Thornton LLP surveyed more than 400 U.S.
chief audit executives (C...
© 2014 Grant Thornton LLP. All rights reserved.
Compliance vs.
adding value
© 2014 Grant Thornton LLP. All rights reserved. 4
36% of CAEs say they are unable
to devote resources to higher value
acti...
© 2014 Grant Thornton LLP. All rights reserved. 5
77% of CAEs chose identifying
improvement opportunities as t he t op
are...
© 2014 Grant Thornton LLP. All rights reserved. 6
Survey Finds: COST is the biggest
impact of regulation
© 2014 Grant Thornton LLP. All rights reserved. 7
Due to heavy focus on regulatory
compliance activities, 53%
of CAEs indi...
© 2014 Grant Thornton LLP. All rights reserved. 8
The way forward means
fullyutilizingexisting
resources
asacriticalpieceo...
© 2014 Grant Thornton LLP. All rights reserved.
Effectively leveraging technology
and data analytics
© 2014 Grant Thornton LLP. All rights reserved. 10
CAEs slow to adopt internal audit
tech, likely due to reluctance to use...
© 2014 Grant Thornton LLP. All rights reserved. 11
CAEs that use technology resources are able to
leverage them across mul...
© 2014 Grant Thornton LLP. All rights reserved. 12
60% of CAEs reported using
data analytics
to enhance the internal audit...
© 2014 Grant Thornton LLP. All rights reserved. 13
Where data analytics is used
the most
Performance measurement
Forensic ...
© 2014 Grant Thornton LLP. All rights reserved. 14
Topbenefitsderived
© 2014 Grant Thornton LLP. All rights reserved.
One-to-many
approach
© 2014 Grant Thornton LLP. All rights reserved. 16
Internal audit needs a
new approach to compliance
Compliance requiremen...
© 2014 Grant Thornton LLP. All rights reserved. 17
69% of CAEs listed increased cost as
the top impact of regulation on
th...
© 2014 Grant Thornton LLP. All rights reserved. 18
Compliance risk
ranks #1 ahead of strategic risk
© 2014 Grant Thornton LLP. All rights reserved. 19
What is the one-to-many approach?
 Leverage control testing across mul...
© 2014 Grant Thornton LLP. All rights reserved. 20
…Only 54% found ways to implement the
approach
92% of CAEs believe they...
© 2014 Grant Thornton LLP. All rights reserved. 21
Killing two or more birds with one stone is a
clear path to efficiency ...
© 2014 Grant Thornton LLP. All rights reserved.
T
h
e
T
A
L
E
N
T
g
a
p
© 2014 Grant Thornton LLP. All rights reserved. 23
Talent plays a significant role within internal
audit—ensuring complian...
© 2014 Grant Thornton LLP. All rights reserved. 24
CAEs rank building talent and skills #3 in
their goals for the next 12 ...
© 2014 Grant Thornton LLP. All rights reserved. 25
Internal auditors are expected to have a wide range
of skills, but need...
© 2014 Grant Thornton LLP. All rights reserved. 26
Bringing
subject matter experts
from other parts of the business for
op...
© 2014 Grant Thornton LLP. All rights reserved. 27
Co-sourcing with an outside
professional services firm
© 2014 Grant Thornton LLP. All rights reserved. 28
Setting up a
special projects budget
for consulting services
© 2014 Grant Thornton LLP. All rights reserved.
Putting it all together
© 2014 Grant Thornton LLP. All rights reserved. 30
To create value out of compliance
activities, CAEs can
leverage techno...
© 2014 Grant Thornton LLP. All rights reserved. 31
Warren Stippich
Partner and National Governance, Risk and
Compliance Pr...
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Strategically leveraging compliance activities: 2014 CAE Survey results

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Grant Thornton LLP’s fourth annual survey of more than 400 chief audit executives (CAEs) from U.S. organizations finds CAEs are facing the realities of a greater compliance burden. See the full survey: http://gt-us.co/1ijnAke

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Strategically leveraging compliance activities: 2014 CAE Survey results

  1. 1. © 2014 Grant Thornton LLP. All rights reserved. Strategically leveraging compliance activities 2014 CAE SURVEY RESULTS
  2. 2. © 2014 Grant Thornton LLP. All rights reserved. 2 Grant Thornton LLP surveyed more than 400 U.S. chief audit executives (CAEs)… Results = CAEs are reprioritizing risk and making difficult resource decisions due to rising compliance requirements
  3. 3. © 2014 Grant Thornton LLP. All rights reserved. Compliance vs. adding value
  4. 4. © 2014 Grant Thornton LLP. All rights reserved. 4 36% of CAEs say they are unable to devote resources to higher value activities due to focus on regulatory compliance
  5. 5. © 2014 Grant Thornton LLP. All rights reserved. 5 77% of CAEs chose identifying improvement opportunities as t he t op area w here int ernal audit organizat ions could add value if not for t he const raint s of com pliance requirem ent s
  6. 6. © 2014 Grant Thornton LLP. All rights reserved. 6 Survey Finds: COST is the biggest impact of regulation
  7. 7. © 2014 Grant Thornton LLP. All rights reserved. 7 Due to heavy focus on regulatory compliance activities, 53% of CAEs indicate reduction in focus on core internal audit areas such as mitigating risk & stronger corporate governance
  8. 8. © 2014 Grant Thornton LLP. All rights reserved. 8 The way forward means fullyutilizingexisting resources asacriticalpieceof maximizinginternal auditefficiency andimpact
  9. 9. © 2014 Grant Thornton LLP. All rights reserved. Effectively leveraging technology and data analytics
  10. 10. © 2014 Grant Thornton LLP. All rights reserved. 10 CAEs slow to adopt internal audit tech, likely due to reluctance to use additional scarce resources Only 29% of CAEs even use GRC/ internal audit specific tech
  11. 11. © 2014 Grant Thornton LLP. All rights reserved. 11 CAEs that use technology resources are able to leverage them across multiple functions
  12. 12. © 2014 Grant Thornton LLP. All rights reserved. 12 60% of CAEs reported using data analytics to enhance the internal audit function
  13. 13. © 2014 Grant Thornton LLP. All rights reserved. 13 Where data analytics is used the most Performance measurement Forensic analysis Predictive analysis
  14. 14. © 2014 Grant Thornton LLP. All rights reserved. 14 Topbenefitsderived
  15. 15. © 2014 Grant Thornton LLP. All rights reserved. One-to-many approach
  16. 16. © 2014 Grant Thornton LLP. All rights reserved. 16 Internal audit needs a new approach to compliance Compliance requirements continue to rise: Dodd Frank Affordable Care Act PCI DSS Anti-corruption regulations Government contract requirements
  17. 17. © 2014 Grant Thornton LLP. All rights reserved. 17 69% of CAEs listed increased cost as the top impact of regulation on their organization …36% of CAEs say they are unable to devote resources to higher-value activities due to the focus on regulatory compliance
  18. 18. © 2014 Grant Thornton LLP. All rights reserved. 18 Compliance risk ranks #1 ahead of strategic risk
  19. 19. © 2014 Grant Thornton LLP. All rights reserved. 19 What is the one-to-many approach?  Leverage control testing across multiple compliance areas  Test once to comply multiple times with various standards CAEs may be able to lessen the compliance burden by satisfying requirements in a more efficient and economical way
  20. 20. © 2014 Grant Thornton LLP. All rights reserved. 20 …Only 54% found ways to implement the approach 92% of CAEs believe they can potentially apply one-to-many principles for to up to 50% of their control testing
  21. 21. © 2014 Grant Thornton LLP. All rights reserved. 21 Killing two or more birds with one stone is a clear path to efficiency gains, although not an easy one Many CAEs believe that they must silo control testing for accuracy
  22. 22. © 2014 Grant Thornton LLP. All rights reserved. T h e T A L E N T g a p
  23. 23. © 2014 Grant Thornton LLP. All rights reserved. 23 Talent plays a significant role within internal audit—ensuring compliance & delivering value 40% of CAEs view “talent quality or capacity” as a barrier to delivering greater value to their orgs
  24. 24. © 2014 Grant Thornton LLP. All rights reserved. 24 CAEs rank building talent and skills #3 in their goals for the next 12 months (above ensuring compliance for key regulations)
  25. 25. © 2014 Grant Thornton LLP. All rights reserved. 25 Internal auditors are expected to have a wide range of skills, but needs may be so specialized that it makes sense to consider alternatives: Learning programs administered internally or externally
  26. 26. © 2014 Grant Thornton LLP. All rights reserved. 26 Bringing subject matter experts from other parts of the business for operational and strategic projects
  27. 27. © 2014 Grant Thornton LLP. All rights reserved. 27 Co-sourcing with an outside professional services firm
  28. 28. © 2014 Grant Thornton LLP. All rights reserved. 28 Setting up a special projects budget for consulting services
  29. 29. © 2014 Grant Thornton LLP. All rights reserved. Putting it all together
  30. 30. © 2014 Grant Thornton LLP. All rights reserved. 30 To create value out of compliance activities, CAEs can leverage technology and data analytics optimize their compliance activities hire the right talent
  31. 31. © 2014 Grant Thornton LLP. All rights reserved. 31 Warren Stippich Partner and National Governance, Risk and Compliance Practice Leader Warren.Stippich@us.gt.com Bailey Jordan Partner and Southeast Region Governance, Risk and Compliance Practice Leader Bailey.Jordan@us.gt.com Contact us Want to learn more about strategically leveraging compliance activities? Teri Suzuki Principal and Northeast Region Governance, Risk and Compliance Practice Leader Teri.Suzuki@us.gt.com Priya Sarjoo Managing Director and Central Region Governance, Risk and Compliance Practice Leader Priya.Sarjoo@us.gt.com Shawn Stewart Partner and West Region Governance, Risk and Compliance Practice Leader Shawn.Stewart@us.gt.com

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