Internal audit leaders need to hire more tech-savvy accountants: IIA

Dive Brief:

Companies hiring for internal audit should prepare for disruptive innovations by employing more technology-savvy workers who are ready to take on challenges in business strategy, the Institute of Internal Auditors said Monday.
Internal audit leaders “confront a critical task of ensuring a steady stream of qualified new workers in the face of labor shortages, existing competition and new and potentially disruptive business models, ”the IIA said in a study sponsored by Deloitte.
“For the profession to remain healthy, the next generation of internal auditors must be tech-savvy, innovative and more resilient than any of its predecessors,” according to the IIA. “Finding, training, and keeping these new überauditors will not be easy.”

Dive Insight:

For years the demand for accountants for audit and other roles has exceeded supply, and there is no guarantee that the imbalance will end anytime soon.

The number of students who graduated at the end of the 2021-2022 academic year with a degree in accounting plunged 7.4% compared with the prior period, accelerating a six-year trend of declining entrants into the profession, according to the American Institute of Certified Public Accountants.

The number of graduates who received a bachelor’s degree fell 7.8% compared with the 2020-2021 period, while those earning a master’s degree declined 6.4%, the AICPA found. At the conclusion of the 2020-2021 academic year, the number of bachelor’s and master’s degrees awarded fell 2.8% and 4.7%, respectively, compared with the prior period.

Internal audit leaders are trying to tap limited pools of expertise in both accounting and technology, according to IIA.

“Internal audit is competing with some of the biggest names across the tech sector for graduates with backgrounds in AI, cybersecurity and data analytics, IIA CEO Anthony Pugliese said in a statement.

In addition, “we are seeing some of the softer skills related to leadership and communication being prioritized by hiring managers," he said.

Internal audit leaders during the past five years most preferred hiring college graduates who have studied accounting, with 80% citing that undergraduate field, the IIA said.

Internal audit and general business gained 53% and 44% preference levels, respectively, the institute said, reporting on survey results. Computer science and technology were favored by just 43%.

“The evolving technology and risk landscape has expedited the need for internal audit to expand its talent and recruitment pool,” Pugliese said.

In their hiring, internal audit leaders need to prepare for disruption from new technology such as artificial intelligence and robotic process automation, IIA said. The innovations will free some staff for higher-value work while nudging some employees out of the profession.

“New technologies invariably will morph the entire internal audit workforce,” the institute said. “Internal audit will progress beyond providing simple assurance to encompass a broader advisory and business strategy focus.”