Company managers lack a real understanding of the IT risks facing their firms, according to a new PricewaterhouseCoopers study.

The research, carried out for The Institute of Internal Auditors, found that 98 per cent of business leaders and audit chiefs in a wide range of companies thought that IT was strategically important to their company's future.

However, 68 per cent of internal audit heads said they thought boards did not understand the IT risks they face and 74 per cent said they would like more IT risk assurance at a strategic level.

The results clearly indicate the need for robust IT support and indicate why so many firms are opting for IT outsourcing.

PricewaterhouseCoopers partner Grant Waterfall said: "We have seen the re-emergence of large scale corporate investment into IT systems over the last two years and this has prompted many boards to look for greater levels of comfort than ever before.

"Our survey findings suggest that boards and audit committees may not have all the skills they need to understand and deal with IT risk, while mechanisms for communicating IT risks to the board may also not be effective enough."

In a recent survey of SMEs for Connect, the two most important benefits of outsourcing were 'guaranteed response times' and 'allowing in-house IT staff to concentrate on more strategic issues'