Effective Audit Department Planning for 2013

After the summer holidays and excitement of the Olympics many Chief Audit Executives (CAEs) are now turning their attention to 2013. For many CAEs, autumn is a time for annual budgeting and planning. They will be preparing for a series of predictable but robust challenges and preparing answers for the upcoming Executive Committee and Audit Committee meetings.

They are asking themselves the same questions they’ll soon face, including:

• How can I justify the size of my team and 2013 budget given the continuing economic uncertainty?
• How does the cost of my audit team compare to other companies?
• What are the key new risks that my organisation is facing in 2013?
• How do I avoid “group think” when conducting a risk assessment?
• Given new or emerging risks how should I respond and what activity should be in the 2013 audit plan?

Benchmarking provides an invaluable source of data to support CAEs as they get ready for these meetings. Each year, the Audit Director Roundtable (ADR) carries out extensive surveys to provide vital assistance to CAEs at this critical time of the year. These surveys have strong participation from among the 650+ global ADR members.

These surveys include

• Audit staff and budget – this annual survey asks about the size of the audit team, the composition of that team (skills and tenure) as well as the department budget. ADR normalises the data by comparing actual amounts reported by CAEs to their company size. Benchmark results include percent of company revenue devoted to audit and percent of company FTE within the audit team. Comparisons are provided by industry sector and company revenue bands to allow easy analysis. The graphs show median plus upper and lower quartiles. Last year 280 companies completed the survey which then provides a rich database for benchmarking.
• Audit operations – ADR has collected data on audit planning (time spent, period covered by plan, and sources of risk assessment used) as well as technology used by audit teams. Other areas surveyed in 2012 included the use of KPIs and audit reports (for example, length of reports and the use of grades). All of these are vital areas when CAEs are searching for further auditor productivity improvements and trying to identify low value activities to terminate.
• Emerging risks and Hot Spots – ADR monitors the evolving risk environment faced by the global membership. In response, we regularly publish an Emerging Risk report which summarises our consolidated view on the most urgent risks facing organisations around the world. In addition, each year — in the autumn planning period — we publish our view of the top 10 risks our members face. Many CAEs use this report as a vital resource when preparing their audit plan – primarily as a “check and challenge.” This report provides a succinct, independent , and expert external perspective into the risk identification / assessment process. ADR also identifies the best practice audit response to every risk featured in the Hot Spots report.

 

What is ADR Doing for Members?

ADR Benchmarking:

Review online and utilise results from our 2011 Audit Budget and Headcount benchmarking survey on auditor skills, education, and activity. Participate in our 2012 Audit Budget and Headcount survey and receive a customised report in October.

Member organisations that participated in the Audit Operations survey 2012 will receive their customised reports in September.

ADR Research: Review the 2012 Audit Hot Spots, the 2012 IT Audit Hot Spots , June 2012 Emerging Risks Report

ADR Webinars: Join the Q3 emerging risks update webinar on 16 August and Audit Operations – key finding on 30 October.

If you would like to comment on this blog or want further information please contact Ian Beale