Many in-house and outsourced internal audit functions have operated in fundamentally the same manner for many years. This is not suggesting that it hasn’t or doesn’t add value, but we do want to question whether this approach is undermining internal audit’s ‘potential’ value. Ignoring technology leave internal audit being reactive rather than proactive?
Data analytics is commonplace in many audit teams but again tends to be looking backwards rather than monitoring the present and anticipating the future.
I want to know if I have issues today and whether data is pointing to potential issues tomorrow or next week. Being told that I had an issue three months ago and having potential control gaps during that period does not help my business or the people in it.
Digitally enabling business to assist Internal Audit performance
- Implement cloud-based solutions with hard controls such as approval workflows to prevent unauthorised activity and ensure governance over approvals.
- Implement AI to automate repetitive, data entry tasks to eliminate errors and reduce the risk created by that group of people (albeit small) looking to take advantage of potential control weaknesses.
How can digitalised Internal Audit be different?
- Imagine leveraging technology to have all the data in key systems analysed for errors, trends, variances and exceptions in real time. Consider how valueable it would be to be to identify and tell management today that there is an abnormal pattern of transactions being entered into your finance system, a trend in absentism or a variation to normal operational trends?
- Imagine your key systems and applications using workflows to create hard controls that cannot be circumvented. Receive immediate notification if someone even tries to circumvent those controls.
- Being directed to present and emerging risks to objectives, processes, systems and people allows internal audit to maximise its value.
- Identify control gaps and implement immediate fixes rather than leaving ‘gaps’ until a scheduled review.
We know that data can help management make better decisions. The same data, viewed differently, can help internal auditors make better, more timely recommendations to mitigate risk and improve processes.
If transforming your internal audit function is important, or you would like to learn more about digitising internal audit, please contact us to discuss improving your governance and performance.