Impact of the COVID-19 crisis on Internal Audit Functions of financial institutions
Impact of the COVID-19 crisis on Internal Audit
The pandemic crisis that the world currently faces is a problem that disrupts the entire society. Financial institutions play an important role to minimize the effect as much as possible. With a complete focus on ensuring a well-functioning financial system in these times of crisis, Internal Audit Functions are revisiting the role they need to play within their institution.
KPMG has published a new article that provides a description of the challenges that Internal Audit Functions (IAF) are currently facing within the financial sector and to make recommendations on how to respond to these issues. It focuses on the impact of the pandemic crisis on the audit planning and execution phase.
To illustrate, IAFs need to reassess how to effectively play their role as third line of defense in the institution and reassess priorities as newly emerged threats have to be taken into account during the audit planning phase. In addition, when reprioritizing and updating the audit plan, IAFs need to reexamine their resources, knowledge and capabilities.
Furthermore, the changing landscape calls for flexibility during the execution of internal audits. The scope of the planned audits should be reconsidered in order to make sure that the audits are still relevant and essential for the business. At the same time, travel restrictions and remote working should not affect the quality of the work that needs to be done. Therefore, all relevant factors should be considered within each execution phase to ensure that the IAF is still working effectively.
Beyond immediate actions, organizations should use this crisis as an opportunity to reflect on the ability to navigate a crisis and, going forward, consider actions to increase agility and become more resilient in the future. The article serves as a first stepping stone towards a well-functioning IAF for financial institutions within these circumstances. Let's make sure to connect and support each other in ensuring strong and value adding IAFs while our financial institutions and society at large are going through these times.
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