Things change so quickly these days that making any long-term predictions seem to have little value.

It feels that only yesterday we welcomed our internal audit colleagues at our usual Impactful Assurance forum at our KPMG office in Wellington, but now many of us are back working from our homes and thinking again about business continuity and contingency plans.

While we don’t exactly know what will happen in 2022, it’s important to look forward as best we can, operating strategically and not just reactively. At KPMG, we believe that this year will be shaped by the following key trends.


The Covid-19 pandemic has affected internal audit functions in many ways. We have seen internal audit resources refocused on Covid response activities, internal auditors seconded to support their organisation’s emergency responses or permanently leaving their organisations. The closing of borders has also led to a shortage of internal audit staff and the government pay freeze has contributed to the wage war for internal audit talent across public and private sectors.

While New Zealand will open its borders for Kiwis and foreigners in 2022, the battle for talent will continue. Omicron or new SARS-COV-2 variants may still further limit short-term capacity.

In this environment, Internal Auditor Leaders will need to find the right balance between filling in the vacant roles and maintaining the quality of deliverables and budgets. Simply filling in available positions may do more harm if done without proper consideration of skills and, more importantly, cultural fit.

Being relevant

Many internal audit teams have found themselves in a situation where very little internal audit activity has occurred in the past 12-24 months – usually due to the lack of capacity both within internal audit teams and business. Many functions have a backlog of internal audit reviews that may have lost relevance as, traditionally, it has been assumed that volume equals value.

After such a long break it may be challenging for internal audit teams to scale up their activities and convince key business leaders that internal audit will bring value to their operations. Your organisations may start to believe that they can operate effectively without internal audit. This is a slippery path and should be quickly addressed by internal audit leaders through robust discussions with senior executives and Audit Committees.

Internal audit leaders should clearly articulate the unique value of their functions, show their team’s ability to focus on areas that matter to their organisations and address emerging risks.

Extracting insights from data analytics

Remote ways of working don’t allow internal audit professionals to ‘keep the finger on the pulse’ of their organisations. There are far fewer opportunities for ‘watercooler chats’ or informal discussions in the kitchen area to help understand the vibe of the organisation and identify early ‘red flags’.

In response, internal audit functions should double-down on the proactive use of data analytics to identify and inform their organisation of potential control breakdowns and fraud indicators. Current technology, available now at modest cost, can bring enormous benefits for internal audit and can be used not only to review past events, but to draw insights about the future.

Focus on people

Rising interest rates and inflation, new Covid-related disruptions and the fatigue accumulated over the previous two years, will all influence the health and wellbeing of New Zealanders. All these matters will give rise to many people-related risks.

Internal audit will have a role to play to help organisations better manage such risks, such as helping organisations identify and remedy operational errors, potential fraud and corruption, better managing staff workload, and putting in place practical diversity and inclusion programmes, and supportive wellbeing initiatives.

Internal audit will have opportunities to bring insights about organisational culture through evaluating ‘soft controls’ and focusing on ‘why things went wrong’ rather than just presenting the facts.

Getting the best from service providers

Capacity constraints, the need for specialised skills and unique IP, may require many internal audit functions to procure internal audit services externally.

Internal audit leaders need to be mindful that assurance services providers may face similar resourcing and capacity constraints, so forward planning of involvement of external parties will become important.

To avoid being left without support or paying a premium for last minute requests, try to identify your assurance needs early and work together with service providers to determine the scope and timing that would work for both parties. Packaging the work in bundles and performing fieldwork during the ‘quieter’ periods, such as February-April or July-August, may get you better value for money.

Internal audit functions with already developed partnership relationships with their assurance service providers will be best placed to deliver their annual plans.


Overall, 2022 can be a breakthrough year for internal audit professionals. There will be plenty of opportunities to innovate and make a real difference to your organisations, shaping the way they look forward after a long period of reactivity. It is not a make-or-break year for the profession, but those functions that are able to take a full advantage of the above trends will really stand out.

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