Process automation and digital transformation are near the top of most corporate agendas, and the IT audit function has never held a more crucial role. The results of the 6th Annual IT Audit Benchmarking Study from ISACA and Protiviti illustrate the increasingly integrated role IT audit leaders and professionals are assuming in regard to technology initiatives in their organizations.
I had the opportunity, along with my colleague David Brand and ISACA director Ed Moyle, to discuss the results at length in a recent webinar. You can view an archived version by registering here. In the meantime, I wanted to give you a quick rundown of the top technology challenges expressed by respondents, and how those challenges compare with the previous year’s results.
No surprise on the top tech challenge: Nearly all organizations are struggling with data privacy and cybersecurity. It’s an area where boards want assurance — even with an understanding that assurance can never be 100 percent, regardless of the amount of money spent. The challenge for IT audit, therefore, lies in determining the right amount of IT audit time and focus to be dedicated to cyber risk and ensuring coverage is in alignment with the risk appetite and priorities of the organization. Though cybersecurity is always a business issue, the risk is typically assigned to IT. IT audit’s effectiveness in this area is strongly related to the experiences and discreet knowledge that the IT auditors in the group bring to the audit. There continues to be a strong push for education and for using the right tools, frameworks, approaches and resources; all are critical elements to ensuring IT auditors to stay in front of the cyber risks they are auditing.
Emerging technology (automation, digitization, cloud, etc.) remains a top challenge for IT auditors, though not ranked as high as last year. Effective IT governance in the face of emerging tech remains a goal for many organizations, and those that ignore it or get it wrong are going to struggle. IT auditors can help their organizations in this area by challenging the effectiveness of IT governance from both a design and operating perspective — this healthy and critical evaluation of the alignment between the business and IT is required in today’s environment. In organizations with enterprise risk management (ERM) functions, there may be a natural overlap in interest between IT governance and ERM and IT auditors are well-positioned to seek out this partnership to share and receive perspectives from the ERM group.
Infrastructure management, regulatory compliance, and budget/cost concerns all moved up the list this year — a risk triumvirate that I think contributed to the return of third party/vendor management as a top-ten challenge, after dropping below the top ten last year. Infrastructure management and third-party vendor management are closely related as organizations increase reliance on infrastructure as a service (IAAS) and software as a service (SAAS) providers in an attempt to reduce their IT footprint. To ensure maturity in third-party risk management and ease related challenges, IT audit should be involved in the early stages of significant infrastructure projects, evaluating the processes and controls around third-party vendor management, ensuring upfront due diligence activities are completed, and reviewing service level agreements (SLAs) and contracts before they are signed. There are a number of efforts in the market to provide IT auditors with more avenues for assurance for these relationships – an area I fully expect will continue to see growth.
Missing from this year’s top-ten list is big data — a surprise, to say the least. In all my conversation with colleagues, big data remains a top priority, and is closely tied to many of the other top ten challenges. Its absence on the list, in my opinion, has more to do with the temporary elevation of other priorities, and a growing familiarity with the features, risks and benefits of big data, rather than any lessening of focus. Big data also looms large in this year’s Internal Audit Capabilities and Needs Survey, so the conversations around it are certainly not over.
Last, but certainly not least, staffing and skills cut across every other top technology challenge mentioned. Although it dropped slightly from last year’s ranking, it remains a top-five challenge — a reflection of the critical need for internal audit functions to hire and train tech-savvy auditors capable of understanding IT risks. This is particularly relevant for addressing the top challenge of cybersecurity, where expertise is key to gaining the cooperation and trust of IT. Co-sourcing, or even outsourcing of IT audit, can provide that expertise without straining internal resources. Each organization must decide on whether and how to augment its skills based on its specific level of reliance on technology.
Clearly, there is much to unpack from this year’s IT Audit survey results, and we will continue to analyze the findings and track progress in how companies address them. For the full ranking of challenges and a more in-depth analysis, visit our 6th Annual IT Audit Benchmarking Study page.