Leathwaite's 2024 Chief Auditor Outlook Reveals Technology, Productivity, and Succession Challenges

Leathwaite, the leading consultancy in executive search and leadership development, has released its 2024 Chief Auditor Outlook. This comprehensive study draws on insights from chief auditors worldwide and supplemented by perspectives from other C-suite executives. This analysis delves into the evolving audit landscape, pinpointing technology, productivity, and succession planning as key focus areas for the next 12 months.

The study highlights the increasing importance of technology and data in audit leadership, with a notable emphasis on using analytics for strategic decision-making. Despite two-thirds of chief auditors employing analytics to guide more strategic decisions, only 6% feel they've reached an advanced level in data analytics use. This gap underscores a broader challenge within the audit leadership community, particularly a hesitance towards AI and emerging technologies, with most audit leaders (59%) feeling unprepared to leverage new technological opportunities, including the potential offered by Generative AI.

In addressing the integration of technology, automation, and data analytics, the report stresses the necessity for audit leaders to craft visions that marry these elements seamlessly. Such strategic foresight is crucial for driving transformation within their functions and meeting the increasingly high expectations of board-level stakeholders. However, while internal audit departments are making strides in embracing new technologies, the readiness of the broader organisation to adopt these advancements, particularly Gen AI, remains limited, with only a small fraction of audit leaders (5%) believing their organisations are fully prepared for this shift.

The outlook also sheds light on the prioritisation of efficiency over budget increases, illustrating a shift towards investing in areas that promise tangible improvements, like technology, automation, and process efficiencies, rather than simply expanding budgets. This strategic investment mindset is echoed across other functional areas, highlighting a collective move towards leveraging technological advancements to drive growth and modernisation, even amidst potential budget constraints.

Succession planning emerges as a pressing concern, with a significant portion of respondents expressing doubts about the effectiveness of internal succession strategies. This apprehension points to a critical gap in preparing for future leadership and underscores the importance of implementing robust measures to ensure the audit function's resilience and continuity. The consequences of inadequate succession planning could manifest in losing valuable institutional knowledge and declining employee morale, potentially prompting key talent to pursue opportunities elsewhere.

The report concludes by emphasising the role of audit leaders in fostering stakeholder engagement, relationship building, and business insight. Effective engagement up to the board level is instrumental in fostering an environment of trust, transparency, and collaboration, which is vital for enhancing audit quality and impact. With a critical focus on boosting capabilities in technology and data, significant investments in these areas are anticipated in the coming year, signifying the central role of technology integration in building trust and driving the audit function forward.

Leathwaite's 2024 Chief Auditor Outlook presents a roadmap for audit leaders and organisations. It highlights the necessity of embracing innovation, addressing succession planning challenges, and enhancing productivity. By focusing on these key areas, Leathwaite continues to support leaders in navigating the complexities of the modern corporate environment.

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