Building on new approaches
2019 planning priorities and key challenges for Internal Audit in Financial Services
The fifth edition of our annual report on the planning priorities for Internal Audit in Financial Services provides an overview of the developments and challenges faced by audit functions and where they could focus over the next year.
Focus on functional transformation
The financial services landscape in 2018 is in many ways, little changed from this time last year. Interest rates remain low, corporate strategies remain focused on cost reduction, and the uncertainty of Brexit continues to dominate the political agenda.
Despite this, it is clear from the breadth of topics that the role of internal audit (IA) in Financial Services (FS) continues to evolve. IA is being challenged to provide increasingly complex assurance and the focus on functional transformation, which we first articulated in our 2018 publication, continues. Reflecting this, the theme of this year’s publication is ‘building on new approaches’.
For the first time we have included a dedicated section focusing on some of the new tools and techniques available to IA to deliver their evolving mandate. Agile auditing, the use of automation and the talent needs of the IA teams of tomorrow are all featured. Whilst readers may be familiar with some of these terms, the inclusion of topics such as risk sensing and behavioural analytics represent the cutting edge of internal auditing and demonstrate how technology is changing the way our professions works. We develop such topics further in a separate publication, Internal Audit 3.0, released earlier this year.
New areas of focus
There are also a number of new focus areas to consider for inclusion in annual audit plans. We anticipate an increased emphasis on digital risks (including artificial intelligence and cloud computing), a renewed focus on prudential risks (including model error risk) and an acknowledgement that sustained M&A activity is increasingly requiring IA functions to confront the challenge of auditing high-risk Fin and Reg Tech acquisitions.
Our report provides further detail on each of these interesting topics. For each of the topics you will find a brief commentary providing some background, along with notes on how the topic can be audited and some of the potential challenges that you may face.