As Risks Continue to Abound, Many Plan to Strengthen Internal Controls
Only 5.8% of respondents report a decrease in the size and frequency of risks that their organizations’ internal controls programs faced during the past year, according to a new Deloitte poll. When asked if their organizations plan to strengthen resilience for internal controls in the year ahead, over three-quarters said “yes” (77.6%).
“Focusing too many resources on ‘firefighting’ is not a sustainable approach to risk management,” said Trina Huelsman, a Deloitte Risk & Financial Advisory accounting and internal controls practice leader and partner, Deloitte & Touche LLP. “Instead, leading organizations are shifting to a more resilient posture that balances monitoring and management of short-term risks with a longer-term, tech-enabled approach to proactively identify emerging risks and get ahead of key strategic business and IT initiatives.”
Just 22.1% of respondents report that their organizations leverage advanced technologies — like, artificial intelligence, robotic process automation and analytics and visualization — within their internal controls programs.
“As organizations sprint to digitally transform nearly all aspects of their businesses to manage disruption, internal controls programs should not be left out of modernization efforts,” said Stuart Rubin, a Deloitte Risk & Financial Advisory managing director and controls advisory leader, Deloitte & Touche LLP. “Advanced technologies can help shift internal controls programs away from a lookback-focus to a near real-time dashboarding and visualization approach that’s both packed with insights and sustainable, thanks to automation-based design and cutting-edge capabilities like AI and advanced analytics.”
Within the next six months, poll respondents expect their top internal controls program challenges to include staffing changes and the virtual work environment (26.9%) and third-party risks (22.2%). Looking ahead 12 months, current limitations in respondents’ organizational technology stacks were noted as the greatest challenge for 51.3% of respondents. They highlighted slow adoption of newer technologies (21.3%), the need for new or upgraded ERP systems and speed of cloud migration (10.5%) as top challenges.