Survey Reveals Growing Trends in Internal Audit Profession: Budgets, Remote Work, & Sustainability

The Internal Audit Foundation has released its annual North American Pulse of Internal Audit report, offering critical insights into the state of the internal audit profession. Based on survey responses from 448 Chief Audit Executives (CAEs) and directors, the report sheds light on key trends shaping the industry in 2024.

Following significant cuts induced by the COVID-19 pandemic, the survey indicates a promising trend of recovery for the internal audit profession in North America. Notably, the percentage of functions increasing their budgets now surpasses those decreasing budgets by a significant margin (36% vs. 13%). Similarly, there is a shift towards increasing staffing levels, with 26% of functions expanding their teams compared to 11% reducing headcount.

Approximately 60% of internal audit functions are leveraging outsourcing or co-sourcing, with larger functions leading the charge at 74%. Notably, technology-related engagements, particularly cybersecurity and general IT, are the most commonly outsourced services. Surprisingly, Sarbanes-Oxley compliance does not rank high among the areas for leveraging sourced services.

The pandemic-induced shift towards remote work seems to have stabilized, with 72% of respondents reporting that they work remotely half of their time or more. Millennials, in particular, are more inclined to lead functions where all work is conducted remotely. Moreover, they are more optimistic about the continuation of remote work compared to other generations.

The survey highlights a significant trend in hiring recent college graduates, with nearly one-third of respondents indicating such recruitment in the past year. Larger internal audit functions, employing over 25 Full-Time Equivalents (FTEs), exhibit higher rates of hiring recent graduates.

Despite the anticipation of forthcoming sustainability regulations, the integration of sustainability into audit plans remains relatively low. Only about 22% of respondents incorporate sustainability as part of their auditing process, with sustainability audits representing a small percentage of overall audit plans.

In summary, the report suggests that CAEs in 2024 are focused on rebuilding staff and enhancing access to technological expertise. Remote work has become entrenched as the new normal, with implications for both current operations and future hiring practices. While sustainability is increasingly considered in audits in general, it has yet to emerge as a significant focus area in audit plans.

The report, designed as a benchmarking tool for internal audit functions, compares metrics across various organization types, including publicly traded, privately held, public sector, nonprofit, and financial services.

The findings provide valuable insights for industry leaders seeking to understand and manage internal audit functions effectively in an evolving landscape.

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