Financial Services Audit

In a digital world, financial institutions and the broader financial services industry are undergoing a profound change. This is permeating throughout organizations, and internal auditors need to be aware of how digitalization is impacting the business and how embracing new technologies can drive efficiencies in the internal audit function.

In this executive summary, we highlight the financial services industry responses to Protiviti’s 2017 Internal Audit Capabilities and Needs Survey. We look into how internal auditors are leveraging the use of analytics in the auditing process and discuss other key findings, such as Cybersecurity, the Cloud and Model Risk. A deeper dive into these results will be issued in June.

Our notable findings:

Data analytics is gaining a foothold in financial services internal auditing but it needs to be taken to another level to meet expectations and to keep pace with technological change – Two out of three departments utilize analytics as part of the audit process.
Most internal audit shops are still in their “analytics infancy” – A majority of respondents judge their analytics capabilities to be at the lower end of the maturity spectrum.
The more mature analytics capabilities are, the greater value they’re perceived to deliver – Organizations with more advanced analytics capabilities in the internal audit department, as well as those employing proven best practices, see greater value coming from data analytics.
Stress testing and CCAR remain top-of-mind for financial services auditors – Model risk- related issues, such as stress testing and CCAR, are foremost concerns, as are new accounting standards for CECL.
Cybersecurity, cloud computing and big data are constant issues for financial services firms – Auditors are grappling with technology-related risks, new legislation and the need to become more efficient in a digital world.
Business and digital transformation is drawing more attention – Not only is this a much higher priority compared to prior years, but its effects are infiltrating most audit plans and activities.