Managing in volatile times: the role of Internal Audit |
In May 2007 Deloitte surveyed over 100 chairs and directors from the top ASX 200 companies. Only 28% of those interviewed at the time saw a changing economic environment as a key agenda issue. Even 12 months ago it is likely that few corporate scenarios would have included contingency planning for:
- a significant fall in forecast GDP growth from 3.0% in 2008 to 2.3% for 2009
- a roller-coaster $AUD which actually headed close to parity before falling into the high 50c range – while forecasts for 2008/9 were for rates in the mid to high 70c range
- oil prices ultimately reaching 110 $USD before falling back to 50 $USD – when forecasts were for 60-70 $USD for 2008 and 2009
- a fall in the consumer confidence index from 120 in September 2007 to below 80 by July 2008, the lowest in many years.
The recent decline in economic conditions has been unwanted, unexpected and, in some ways, unprecedented. It has all the hallmarks of a corporate strategist’s worst nightmare. But is it a Risk Managers’ dream opportunity?
At the Deloitte Risk Series round table in November 2008 Chief Risk Officers and heads of Internal Audit considered the implications of current market
conditions on key components of organisational performance: revenue, costs, assets and ‘expectations’ or stakeholder management. Key issues related to each component of performance were identified, reviewed and ranked.
The attached 16 page document is a summary of the discussion – including the consensus of the ‘voting’ to rank current issues – as well as views on the need to revisit Internal Audit Plans and the opportunities for Internal Audit to assist their organisations.
To read the consolidation of views, please download the attachment below.
Further resources:
Winds of change: control considerations during an economic downturn
Deloitte Risk Services (UK), October 2008
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Managing in volatile times: the role of Internal Audit
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