Protiviti releases Internal Auditing around the World

08 July 2015 Consultancy.uk

Global consulting firm Protiviti has released the 2015-edition of its annual ‘Internal Auditing around the World’ publication. The report provides insight in the evolution of the internal audit profession through the eyes of ten companies from around the globe as a means to providing executives and internal audit professionals with a deeper understanding of the business function.

With more than 3,700 professionals across 70 offices in over 20 countries, Protiviti is one of the larger consultancies of the globe. The firm, founded in 2002, supports clients with a broad range of management consultancy, IT consulting and financial advisory services. Protiviti was recently named a ‘Best Company to Work For’ by Fortune (Fortune 100 ranking) and a top 15 'Best Firm to Work For' by Consulting Magazine.

Internal Auditing Around the World - Protiviti

One of Protiviti’s key service areas is internal audit*, a field within which it has over the past two decades built a strong track record, both from a thought leadership perspective as well as in terms of delivery. As part of its internal audit research agenda, the business advisory releases several annual studies, including its ‘Internal Audit Capabilities and Needs Survey’, ‘IT Audit Benchmarking Survey’, ‘Sarbanes-Oxley Compliance Survey’ and last but not least the ‘Internal Auditing around the World’ series.

Internal Auditing around the World
On Monday Protiviti released the 11th edition of its ‘Internal Auditing around the World’ report, a publication that explores the changing internal audit landscape, identifying the key macro-economic challenges and business trends and the impact they have on the function. “The role of the internal auditor has shifted dramatically during the last several years, and it’s important to recognize these changes and plan accordingly,” said Brian Christensen, Executive Vice President at Protiviti. In this year’s edition, special attention is given to the differences between expectations of chief audit executives (CAEs) and internal audit stakeholders, and consequently the activities that both parties can do to converge their beliefs.

Internal Auditing - Ten Companies

Contrary to typical consulting though leadership, which typically presents key findings from the eyes of the researchers, Protiviti’s ‘Internal Auditing around the World’ publication places client companies at the heart of the research, profiling ten global companies from a variety of industries and their challenges as well as approach to best practice internal audit management. Christensen explains: “We share the perspectives of ten companies’ internal audit functions on the delicate balancing act of becoming a more strategic partner to the business while not compromising their independence and objectivity.”

* Internal audit is defined as an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations.

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Late payment culture cripples productivity of SMEs

29 March 2019 Consultancy.uk

UK SMEs are seeing their efforts to grow stifled by late payments, causing thousands to enter insolvency proceedings each year. According to experts from Duff & Phelps, this also has a major impact on the UK’s economy, meaning late payment culture must be tackled if the country is to dodge yet more economic stagnation in the shadow of Brexit.

Small and mid-sized enterprises in the UK face a myriad of pressures at present. Brexit anxieties are keenly felt by SMEs, with more than nine in 10 suggesting recently that economic conditions have worsened in the last 12 months. 66% of SME leaders also expect conditions to further worsen in the coming year.

At the same time, firms are keen to see value for money from investing in external expertise. Consulting fees which weight much more heavily on smaller firms, who spend £60 billion per year on professional services, but feel that more than £12 billion of that figure is wasted on unnecessary or bad advice.

Late payment culture cripples productivity of SMEs

Above all, however, SMEs are extremely vulnerable to late payments, and, according to a new study, the situation is only getting worse at present. According to corporate rescue consultancy Duff & Phelps, small businesses in the UK are facing a collective bill of £6.7 billion per annum due to late payments by other companies, while the average value of each late payment now stands at £6,142. This has risen from £2.6 billion in 2017, illustrating the plight of SMEs, particularly with uncertain economic times ahead.

Indeed, the spike in late payments has already caused significant productivity issues for SMEs, which in turn compromises their financial stability. With staff wasting hours chasing down late payments and businesses becoming preoccupied with short-term cash flow problems, they are less able to concentrate on creating new value for the firm, which in many cases gradually slides toward insolvency.

Small businesses across the UK are facing major cash flow pressure, leading to increased financial instability as a direct result of a late payments culture. This is likely a big driver of the UK’s 20% boom in insolvencies over the last three years, especially as it has a knock-on effect on other SMEs within the supply chain of those struggling firms. Approximately 50,000 small businesses fail each year because of late payments, amounting to a shortfall of more than £2.5 billion for the UK economy. 

Commenting on the findings, Paul Williams, Managing Director, Duff & Phelps, said, “In this modern era of technology, which is designed to enable business agility, late payments are particularly galling as there are no excuses. The day of the ‘cheque is in the post’ is long over!... More can be done to avoid businesses reaching this situation in the first place. SMEs underpin the economy, so prioritising timely payments will help allow business owners to focus their time and energy on providing good quality products and services and adding value to the customer experience, rather than chasing outstanding payments.”

The UK Government currently promotes its voluntary Prompt Payment Code to encourage good practice, but late payments by larger companies remain a common pain point for many SMEs. There may be hope for an end to late payments, however, following an announcement in the Spring Statement from Chancellor Philip Hammond. The Government aims to crack down on the practice, with Hammond stating big companies should hire a Non-Executive Director to be responsible for reducing late payments to small suppliers. The statement also advises that organizations publish payment practices in their annual reports.