The 2017/18. Global Audit Survey. The Human Capital Specialists. March 2018

Transcription

1 The 2017/18 Global Audit Survey

2 Executive Summary The inaugural Leathwaite audit survey polled individuals in leadership roles within the audit functions of financial services firms globally. The survey was designed to give a global perspective on the challenges, concerns and priorities facing chief auditors and their management teams. Reacting to and addressing regulation continues to be a long term challenge, however, the broader feedback suggests these leaders are trying to adapt and innovate the audit approach for an increasingly digitised, automated and technology driven business. The primary theme to emerge was a focus on data remains an accounting degree over computer science. management, analytics and technology. This is both from In addition to a focus on data and technology, cyber the perspective of leveraging data and technology to security is widely considered a top priority by many drive a more efficient, automated and targeted audit boards across financial services following recent public process, as well as bringing in stronger technology subject breaches at the NHS, Deloitte and Equifax, yet arguably matter expertise to provide better assurance and risk it s the largest skills gap at board and executive level. management to the business. This is further evidence of Audit functions are therefore investing heavily in cyber the lines between the business and technology function expertise. To fulfil this, functions have looked to becoming ever blurred. technologists and second line cyber experts. 66% of respondents suggested technology experience was more However, where are audit functions in this evolution? The valuable than audit experience when hiring, however in majority of respondents agreed that the use of data our experience, the disparity in compensation between analytics would have the greatest impact on the work they first and second line functions compared to audit can carried out, yet 85% of respondents highlighted data price many leaders out. management as the key area for improvement within their function. In addition, the use of agile methodology is Aside from the focus on technology, most respondents widely being implemented as a way of supporting are happy in the industry however would like further increasingly digitised businesses however 56% of those support from the audit committee chair with leadership, surveyed suggested it needed improvement at their firms. mentoring and insights into other firms. This tallies with Despite the vast increases in audit budgets post crisis, it stakeholder management and leadership skills being would therefore seem continued investment is needed in selected as the most important characteristics for a chief order to take advantage of the benefits data and agile auditor. In addition, financial benefits and executive can provide. coaching from their employers were equally important to respondents (26% each). The vast majority feel a move Predicted hiring needs are also reflected in this. Data into another governance role (risk, compliance or front analytics, technology audit and cyber security audit were office controls) is the most viable route for career all in the top four focus areas. While technology audit progression. We ve seen this in action at Barclays, Citi and hiring has been gaining pace for some time (63% of audit UBS, all of whom have moved former chief auditors into searches conducted by Leathwaite globally since 2015 broader control & governance roles. have required technology audit skills or an understanding of technology) it s not likely to slow in the foreseeable Stuart Higson future. Despite the focus on technology experience however, the preference for professional qualifications

3 Composition of respondents by industry segment Composition of respondents by region

4 Composition of respondents by team size Composition of respondents by role

5 Digitization / automation is prioritised Audit s adoption of digitization / automation is of immediate importance however regulation remains a long-term challenge. The adoption of agile methodology Data management and the adoption of agile methodology will be the key differentiators when assessing cutting edge audit functions (need improving).

6 Data management and regulatory demands bigger influencers than AI Headcount won t decrease

7 Hiring will focus on data professionals and technology auditors 63% of audit searches conducted by Leathwaite since 2015 have required technology auditors. Technologists preferred to audit professionals Cyber understanding is arguably the biggest skills gap at board level, putting more pressure on audit functions to bring in senior cyber leaders.

8 Successful Chief Auditors are seen as stakeholder managers and leaders Non-financial benefits are just as important as compensation When hiring chief auditors/audit leaders, there s an increasing view that auditors

9 Audit professionals want to stay in financial services First and second line roles are natural routes for progression Barclays, Citi and UBS have all moved former auditors into the Chief Compliance Officer and Chief Controls Officer roles.

10 Accounting qualifications are still the priority, despite the focus on technology and cyber risks Monthly or ad hoc regulatory engagement is commonplace

11 Advanced planning and a flexible audit methodology are equally important Where can Audit Committee Chairs provide more support?

12 The big four remain vital Summary In summary, audit continues to be a function in the spotlight. As the regulatory environment remains unstable and in a post SMR and MRT world, Chief Auditors and audit functions face increasing scrutiny from boards, regulators and shareholders. Leadership hiring remains a priority, with audit typically one of the few functions left outside of external hiring freezes. What will define a cutting edge audit function moving forward however, and perhaps make the difference in preventing major malpractice or controls breaches, is how quickly audit can adopt technology but also keep pace with technological advances and digitisation in the business. Attracting and retaining senior leaders with skills that reflect these advances is therefore paramount.

13 Global Audit Team Please click on names for bios Stuart Higson Martha Harvey-Jones Consultant Director London T: London T: Chris Rowe James Lawrence-Brown Director Director Zurich T: Hong Kong T: Tom Pemberton Owen Buckley Director Consultant New York T: New York T: Sophie Roebuck Blake Jessee Senior Associate Senior Associate London T: New York T: Helen Prudhoe Sean Helverson Senior Associate Associate London T: New York T:

14 The Human Capital Specialists Leathwaite was established with one clear purpose: to help organisations secure the best Human Capital within Support, Enablement & Control Functions. This is done via 4 solutions, 4 offices, 100 people and over 130 clients, globally. For Marketing enquiries please contact Charlotte at: charlotte.collins@leathwaite.com January 2018