An analysis into Maltese internal audit functions’ IT capabilities

Abstract

PURPOSE: The extent to which businesses have placed digital technologies at their lifeline has magnified the complexity of organisational landscapes and brought about a myriad of unprecedented risks. The purpose of this study is to examine the extent to which Maltese Internal Audit Functions are equipping their teams with the necessary IT capabilities to address these developments, highlighting the key challenges encountered in doing so. The study identifies technical competencies, sheds light on any gaps and explores how these are attended to. Furthermore, the study assesses whether Maltese IAFs are able to deliver the IT assurance stakeholders expect. DESIGN: The objectives of the study were pursued through a mixed-methods research approach. Findings were gathered through twenty questionnaires answered by Chief Audit Executives, and semi-structured interviews with six Chief Audit Executives, five External Service Providers and two Audit Committee Members. FINDINGS: Most Maltese Internal Audit Functions are small in size and seldom employ specialised IT auditors. Gaps in resources/skills hinder some Internal Audit Functions’ ability to sufficiently address certain technical aspects of their audit plans and many use several talent sourcing strategies to augment their IT capabilities. Stakeholders feel that all Maltese Internal Auditors need to enhance their IT knowledge, particularly as it is expected that technology will continue to be a significant Internal Audit consideration in the future. CONCLUSIONS: There is room for much progress in Maltese Internal Audit Functions’ IT capabilities. It is acknowledged that all must equip their teams with the necessary technical knowledge and expertise to remain relevant, however, their small size and resulting budget restrictions are great hurdles. IMPLICATIONS: In mapping out local findings against international surveys of the Internal Audit profession, the study calls for Maltese Internal Audit Functions to re-consider the growing implications of IT on the effectiveness of their work and realise the importance of a well-rounded IT capability.