Internal Audit Survey 2023

The 2023 PwC Global Internal Audit Survey captured the views of 4,680 internal audit leaders, including board members and executives, as well as second line risk and compliance leaders, across 81 countries. The survey identified five key findings which are explored in the report. We analysed the survey results from respondents in Aotearoa New Zealand against the broader global trends.

New Zealand organisations, and their internal audit functions, tend to be smaller in size than their global counterparts, and the results indicate they are also less mature. In contrast to the global results, 61% of New Zealand respondents believed that the perceived value of their internal audit function was in providing assurance, with far fewer believing they were viewed as problem solvers (13%), insight generators (6%), or trusted advisers (3%).

Describe the overall value and maturity of your Internal Audit function

This sentiment is reflected across the data - from the level of investment in new technologies, the ability to influence and communicate value across the organisation, to anticipating and advising on future risks.

We have identified five areas of focus and key actions that internal audit teams can take to amplify their impact. We believe that with the right strategies in place, these will create opportunities for internal audit functions in New Zealand, and help them to add significant value to their organisation.

Understand the full risk landscape

New Zealand respondents were largely aligned with their global counterparts in addressing cyber security and information management in their organisation’s internal audit plan. 61% of respondents stated that these risks have already been addressed, versus 68% globally. However, beyond cyber security, New Zealand respondents were far less likely to have addressed key risks such as technology advancement, sustainability and climate change, and supply chain disruption.

Encouragingly, for many organisations these risks are already on the agenda, and so there is opportunity for New Zealand internal audit functions to catch up by raising the profile of existing and emerging risks with their organisation.

61%

of New Zealand respondents have already addressed cyber security and information management in their organisation’s internal audit plan, but were behind their global counterparts in addressing other existing and emerging risks.

Action: Understand the trends across the whole risk landscape and ensure your internal audit plans consider the impact of each on your organisation now, and in the future.

Communicate the value of internal audit

55% of New Zealand respondents believed that the mission statement and objectives of their internal audit function were well understood by the board and executive management. This was a slightly smaller percentage than globally (65%). Yet, New Zealand respondents were significantly less confident than their global equivalents that management (16% v 67%), employees (6% v 42%) and external stakeholders (10% v 46%) understood the purpose and role of the internal audit function.

There is a big opportunity for internal audit functions to share how they can have an impact on the organisation with a broader base of stakeholders. This will not only assist with buy-in to initiatives from other parts of the business, but can help to develop vital connections to identify, plan for and mitigate current and future risks.

55%

of New Zealand respondents believed that the mission statement and objectives of their internal audit function were well understood by the board and executive management.

Action: Consider the purpose and objectives of your internal audit function and your value to the organisation. Articulate this in a way that is succinct and easy to understand, and share this with other core functions.

Elevate strategic risks

87% of New Zealand respondents believed that their internal audit function was ‘somewhat effective’ at raising significant risks and challenges their organisation had not yet considered. However, just 10% felt that their internal audit function was ‘very effective’ in this area, compared to 49% globally.

New Zealand internal audit functions need to consider how they can effectively bring insight and value to their organisation to help influence major change, with the goal of being considered strategic advisers on the current and future risk landscape.

Action: Get clear on what the significant risks are for your organisation and who needs to know about them. Formulate a plan to engage with key stakeholders and decision makers to address strategic risks.

Get clear on your digital strategy

45% of New Zealand respondents identified the need to improve their data, analytics and visualisation tools over the next few years, with others identifying AI, RPA and GRC tools as important to upskill in. This is positive, given that New Zealand respondents were considerably behind their global counterparts in using digital tools to elevate their work. Most had not made a comparable investment in digital tools over the last 12 months, with a focus on outsourcing and training above investing in specialist or emerging technology.

New Zealand internal audit functions need to plan how they source and procure the most appropriate digital tools to drive insights. While it may require significant investment, having access to the right technology will be vital for internal audit functions to keep up with the rapid pace of change.

45%

of New Zealand respondents identified the need to improve their data, analytics and visualisation tools over the next few years, with others identifying AI, RPA and GRC tools as important to upskill in.

Action: Consider your digital strategy and what will work for your internal audit function. Look at the options available - both through developing digital capability in-house and outsourcing. Then plan your investment accordingly.

Access the right talent

New Zealand respondents recognised the need to have great people and a sustainable talent pipeline to provide insight, drive value and instil confidence within their organisation. Yet, they were significantly less confident than their global counterparts that they have the right talent and skills in place now, or that they will be able to attract and retain those core skills over the next 3-5 years. Only 23% were very confident of having the right talent in their organisation in the future, compared to 47% globally.

Nearly half of respondents planned to resolve skills gaps by hiring experienced internal audit specialists, but with a limited talent pool in New Zealand, the industry will need to think differently about how to acquire and develop these vital resources.

Action: Get creative when thinking about your access to skills and resources. Look beyond traditional methods and consider co-sourcing or out-sourcing talent.

PwC Global IA study: real-time benchmarking

If you missed the chance to participate in the survey, or would like to generate your own interactive benchmark report, this tool will allow you to answer a subset of questions from this year’s survey, and compare your responses against the global data set collated as part of the study.

Go to real-time benchmarking