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PricewaterhouseCoopers 2006 State of the Internal Audit Profession Study Shows that Continuous Auditing and Monitoring is Today's Growing Business Trend

Study Shows that 'Non Traditional' Approaches to Internal Auditing Are Now Employed to Strengthen Reporting and Communication With Senior Management and the Audit Committee

NEW YORK, June 26, 2006 (PRIMEZONE) -- According to a new study issued today by PricewaterhouseCoopers, half of the U.S. companies surveyed are now using "continuous auditing" techniques, which typically leverage technology to accelerate the internal audit cycle and improve risk and control assurance, an increase from 35 percent in 2005. Of those that do not yet have continuous auditing techniques in place, 31 percent have implemented plans to do so.

"This may be the beginning of a significant change in the way internal auditing has traditionally been done," says Dick Anderson, partner, PricewaterhouseCoopers Advisory. "While the study indicates that many of these continuous auditing efforts are currently manual and not necessarily 'continuous,' they appear to be taking hold and enabling more timely risk assessments and assurance coverage."

Anderson notes that an increasingly dynamic risk environment is demanding that internal audit provide more timely and reliable assurance relative to risks and controls. Internal audit executives are increasingly looking toward continuous auditing, which employs 'non-traditional' approaches to internal auditing to strengthen reporting and communication with senior management and the audit committee. He adds that technology-enabled auditing, when deployed as part of a broader continuous auditing program, can make the audit process faster, cheaper, more efficient and more effective.

According to the study, the percentage of internal audit resources devoted to Sarbanes-Oxley compliance is continuing to taper off as companies take steps to rebalance Sarbanes-Oxley compliance with broader risk management activities. Only 33 percent of respondents expect to devote 50 percent or more of their internal audit resources to Year Three compliance with Section 404, compared to 71 percent and 45 percent in Year One and Year Two respectively.

Other interesting findings include:

  -- Commitments to quality vary significantly. Surprisingly, only 52 
     percent of respondents reported having a formal quality assurance 
     and improvement program in place, and only 49 percent said they 
     either had completed an external quality assurance review (QAR) 
     or were planning to do so prior to December 31, 2006.

  -- Internal audit faces a continuing shortage of qualified talent. 
     Thirty-two percent of this year's respondents reported that they 
     were actively recruiting for auditor positions that had been 
     vacant for more than six months. This figure remains the same as 
     last year.

  -- Most internal audit groups now include overall ratings or 
     conclusions in audit reports. The increased prevalence of audit 
     ratings is being driven by a number of factors, including an 
     increased focus on internal audit reports by senior management 
     and the desire of chief audit executives to synthesize the 
     assessment of risks and controls. 

To download a full copy of the report, entitled "PricewaterhouseCoopers 2006 State of the Internal Audit Profession Study: Continuous Auditing Gains Momentum," visit www.pwc.com/internalaudit. The 2005 findings, entitled "PricewaterhouseCoopers 2005 State of the Internal Audit Profession Study: Internal Audit Post Sarbanes-Oxley" can be accessed on this site as well.

Methodology

The survey was conducted in the first quarter of 2006 and includes responses from 444 audit managers. Eighty percent are either chief audit executives or internal audit managers and 59 percent are from companies with $1 billion or more in annual revenue. Seventy-nine percent are from internal audit departments with four or more staff.

About PricewaterhouseCoopers

PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 130,000 people in 148 countries work collaboratively using connected thinking to develop fresh perspectives and practical advice.

"PricewaterhouseCoopers" refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

CONTACT:  PricewaterhouseCoopers
          Kathryn Oliver
          (860) 241-7333
          kathryn.oliver@us.pwc.com
          
          Linden Alschuler & Kaplan for PricewaterhouseCoopers
          Suzanne Dawson
          (212) 329-1420
          sdawson@lakpr.com