Strategically leveraging compliance activities: 2014 CAE Survey results

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. 2014 Grant Thornton LLP. All rights reserved. Compliance vs. adding value 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. 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. 2014 Grant Thornton LLP. All rights reserved. 6 Survey Finds: COST is the biggest impact of regulation 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. 2014 Grant Thornton LLP. All rights reserved. 8 The way forward means fullyutilizingexisting resources asacriticalpieceof maximizinginternal auditefficiency andimpact 9. 2014 Grant Thornton LLP. All rights reserved. Effectively leveraging technology and data analytics 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. 2014 Grant Thornton LLP. All rights reserved. 11 CAEs that use technology resources are able to leverage them across multiple functions 12. 2014 Grant Thornton LLP. All rights reserved. 12 60% of CAEs reported using data analytics to enhance the internal audit function 13. 2014 Grant Thornton LLP. All rights reserved. 13 Where data analytics is used the most Performance measurement Forensic analysis Predictive analysis 14. 2014 Grant Thornton LLP. All rights reserved. 14 Topbenefitsderived 15. 2014 Grant Thornton LLP. All rights reserved. One-to-many approach 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. 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. 2014 Grant Thornton LLP. All rights reserved. 18 Compliance risk ranks #1 ahead of strategic risk 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. 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. 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. 2014 Grant Thornton LLP. All rights reserved. T h e T A L E N T g a p 23. 2014 Grant Thornton LLP. All rights reserved. 23 Talent plays a significant role within internal auditensuring compliance & delivering value 40% of CAEs view talent quality or capacity as a barrier to delivering greater value to their orgs 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. 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. 2014 Grant Thornton LLP. All rights reserved. 26 Bringing subject matter experts from other parts of the business for operational and strategic projects 27. 2014 Grant Thornton LLP. All rights reserved. 27 Co-sourcing with an outside professional services firm 28. 2014 Grant Thornton LLP. All rights reserved. 28 Setting up a special projects budget for consulting services 29. 2014 Grant Thornton LLP. All rights reserved. Putting it all together 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. 2014 Grant Thornton LLP. All rights reserved. 31 Warren Stippich Partner and National Governance, Risk and Compliance Practice Leader [email protected] Bailey Jordan Partner and Southeast Region Governance, Risk and Compliance Practice Leader [email protected] Contact us Want to learn more about strategically leveraging compliance activities? Teri Suzuki Principal and Northeast Region Governance, Risk and Compliance Practice Leader [email protected] Priya Sarjoo Managing Director and Central Region Governance, Risk and Compliance Practice Leader [email protected] Shawn Stewart Partner and West Region Governance, Risk and Compliance Practice Leader [email protected]

Strategically leveraging compliance activities: 2014 CAE Survey results

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