PwC outlines five actionable characteristics of the most effective Internal Audit leaders

  • As companies face more risks than ever, they’re looking to their internal audit functions to deliver value by educating stakeholders on emerging risks and leading risk management practices that would improve the business.

According to a new report by PwC of over 1,600 chief audit executives (CAEs), senior management and board members, internal audit functions that have very effective leadership perform better and add greater value to their businesses.

The PwC 2016 State of the Internal Audit Profession Study found a clear correlation between value and leadership. Simply put, strong leaders are the driving force behind internal audit’s ability to add value and deliver excellence beyond its traditional role. It notes that in order to continue fostering internal audit functions to become trusted advisors within their organizations, stakeholders should promote strong internal audit leadership, while audit executives work to elevate the performance and perceptions of their respective functions.

The report provides a focus around 3 core themes that are impacting the performance and perception of internal audit throughout the Middle East region:

1. Value – how is the function staying effective in a changing world?

2. Leadership – what are the attributes of the most effective internal audit leaders?

3. Talent – what are the necessary skills and how do we find the right balance in capacity?

More than half of the stakeholders who participated in PwC’s 2016 State of the Internal Audit Profession study revealed that they now believe internal audit is contributing significant value – up six points from 2015. The study also highlights that 62% of stakeholders expect more value from internal audit with 55% expecting internal audit to be a more proactive trusted advisor within the next five years.

So how are leaders in the Middle East performing?

While overall, almost 1/3 of Middle East respondents rated their leaders as effective (29%), only 14% rated them as very effective. The reverse is true globally, with almost 1/3 of global respondents rating their leaders as very effective (27%) and 20% as effective. However, a worrying percentage of responders (28%) rated their Middle East Leadership as being either Ineffective or Very Ineffective, compared to only 14% of their global counterparts.

Commenting on the study, Andrew Garrett, Head of Internal Audit Services at PwC Middle East said: “Both the global and the Middle East responses to PwC’s 2016 survey show that, as a profession, internal audit delivers value (74% and 95% respectively); and for the Middle East, that value is significant (80%).”

“This is extremely encouraging for the profession, but there is room for improvement – 83% of our global respondents who received some value and 46% of those who received significant value still expect more value from internal audit. When we asked the same question of our Middle East survey participants, their answer was overwhelmingly ‘Yes’ (100% of Middle East respondents).”

PwC’s report outlines five actionable characteristics that are consistently exhibited by the most effective internal audit leaders:

1. Strategy and Vision

The most effective internal audit leaders possess a strong vision and develop an internal audit strategy that aligns with both their organisation’s strategic direction and their stakeholders’ expectations. Visionary leaders are able to see not only where they want to go but also what they have to do to get there, fostering innovation within their function.

2. Business Alignment

The most effective leaders focus on developing trust-based relationships throughout the business. By establishing close partnerships, they better understand what is happening in the business, align themselves and the internal audit function with change, and get ahead of risks while retaining independence and objectivity.

3. Gravitas & Communication 

The most effective leaders possess gravitas; they are confident, composed, and authentic. They have the breadth of skills to bring bold perspectives, think broadly about the organisation, communicate powerfully as peers in executive forums and influence beyond the internal audit function.

4. Position

Strong positioning within an organisation enables the most effective leaders to facilitate proactive discussions about strategic risks as well as influence others in order to build an effective culture of controls throughout the organisation. They drive value and champion change, and use their position to offer greater business contributions.


The most effective leaders excel at the development and mentorship of their people. They develop a talent model that aligns with both the business and internal audit’s vision, delivering the right people with the right skills in the right locations at the right times, leveraging external resources as necessary to meet the organisation’s needs.

“By developing a vision and a strategy beyond the traditional internal audit oversight activities of risk governance, compliance and control – and aligning to the wider business – the internal audit function will be able to move from ‘assurance provider’ and ‘problem-solver’ to generate more meaningful insight and strategic advice that will contribute to business growth.” Andrew Garrett ended.

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