“In 2023 most CAEs are focusing on organisational and departmental digital transformation initiatives and improving team engagement and performance in response to growing assurance needs,” said Leslee McKnight, vice president in the Gartner Risk & Audit Practice. “CAEs need to cover a wider, more challenging set of risks at a time when they are least confident in covering them. To do so, they must find a way to balance meeting their business’ assurance needs without compromising the needs of their teams.”
In a Gartner survey of 112 CAEs the most cited priority is making the leap to more advanced analytics applications (e.g., continuous risk assessment, automation, and AI), followed by keeping up with a rapidly evolving cybersecurity landscape (see Figure 1).
Figure 1: Top 10 priorities for CAEs in 2023
The primary challenges for audit departments reflect the increasing need for audit teams to provide assurance over rapidly evolving technologies, expanded digital transformation and increased department efficiencies.
To achieve these needs, CAEs are concerned about digitalising their audit departments and having the right talent and capacity to provide effective assurance over cyber and IT-related risks.
“CAEs’ focus on providing assurance over technology and digitalisation and advancing audit’s use of data analytics is not new,” said McKnight. “However, audit executives will face increasing pressure to address these challenges as organisations are poised to increase their risk appetites and continue to expand digital investments during the next two years.”
“Leveraging data and growing digital capabilities in the audit department can provide the timely and sufficient coverage their organisations need, but CAEs face continued challenges in evolving audit to take on more efficient and advanced assurance practices.”Leslee McKnight
Challenges ahead in meeting expanded assurance demands
While organisations’ assurance needs in the current environment present CAEs with a unique opportunity to elevate the influence of audit in the organisation, expanding demands also exacerbate the assurance challenges CAEs often struggle to solve.
According to McKnight, CAEs will need to balance playing a strategic role in the enterprise with creating and executing a comprehensive audit strategy that improves audit efficiency, advances data use, and aligns team capabilities with their business's emerging needs.
Although CAEs say that adopting more advanced analytics applications is a priority, very few are confident in their teams’ ability to do so. While most CAEs are focused on keeping up with a rapidly evolving cybersecurity landscape, many lack confidence in their teams’ ability to provide appropriate cybersecurity coverage.
A similar confidence gap trend exists for covering IT risks and critical transformation projects, which CAEs also ranked as top priorities for 2023.
Audit talent management: a top concern for 2023
To improve auditor engagement and retention, nearly half of CAEs are prioritising the development and communication of compelling auditor career paths. Gartner survey data suggests proactive career pathing is key to engaging and retaining employees in highly demanding working environments.
McKnight says CAEs understand the importance of incentivising and supporting audit teams to help them advance their capabilities and their careers. “Ensuring their departments are prepared, engaged, and equipped with the right skills and capabilities will be paramount to keeping pace with enterprise assurance demands in 2023,” he concluded.