In 2022, organisations were hit by a perfect storm of high-impact, interlocking risks that have thrown businesses into a permanent state of crisis, says the latest Risk in Focus 2023 report, by the IIA (Institute of Internal Auditors).
After the covid pandemic, the war in Ukraine has intensified supply chain failures, meaning ‘a state of crisis is the new normality’, according to the report. Besides climate-related natural disasters, looming recession, the cost of living, food shortages, employee welfare and skills deficits, and ‘a rapidly industrialising cyberattack landscape’ businesses face ‘intensifying geopolitical tensions and the very real threat of financial liquidity and solvency risks’. This, the report adds, has forced many organisations not just to rewrite their risk registers, ‘but to tear up outdated risk taxonomies that favour old-style siloed thinking’.
Internal auditors need to get a rapid grip on this, and to think big about what ifs, such as breaks in the supply chain suddenly, or an increase in temperatures, the report advises. It admits there are ‘few obvious, easy answers’. As in the previous year’s report, cybersecurity and data security is rated by most as among the top risks, the risk auditors spend most time and effort on, and the top risk that auditors expect to face, three years from now.
The war in Ukraine took many organisations by surprise, including those with deep commercial interests in the region, the report said.
As for cyber, the report notes that hackers are taking advantage of the burgeoning ransomware-as-a-service ‘industry; and moving into the more ominous area of so-called “killware” to put pressure on those attacked to pay up ..
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