The future of internal audit will be defined by its biggest challenges.
More specifically, internal audit leaders are challenged with limited budgets and pandemic-related workforce disruptions, while also being asked to ensure their teams truly understand and respond to complex business risks. This squeeze is prompting the need for creative solutions, and internal audit leaders are finding them in tools and services that provide automation, analytics and artificial intelligence (AI).
These advanced tools and technologies could work within a software platform, such as a GRC system, or they could be part of a cloud-delivered service or tool. When deployed properly, these technologies can transform internal audit into a more effective, efficient and agile contributor that can scale for the future.
At RSM, we’re working with our clients to deploy a variety of tools and technologies to transform their internal audit functions in the following ways:
- Analytics designed to complement existing risk assessments to facilitate a more data-driven approach
- Data profiling at the pre-planning stage of an audit to help you identify potential areas of concern
- Risk-scoring techniques to highlight transactions or entities that warrant the most attention and to reduce the risk of false-positives over time
- Anomaly detection ranging from rules-based analysis to more advanced statistical and predictive models
- Data visualization within dynamic dashboards to monitor risks
- Testing techniques that leverage automation to assess large data sets efficiently
The benefits of integrating advanced technologies within internal audit
These technologies result in more efficient and more cost-effective processes, and that’s powerful. But they also enable data optimization, which is even more compelling because it not only propels continued improvement through process analytics, but also enables internal audit to contribute more enterprise value through two critical benefits:
1. Better business alignment
Organizations are changing rapidly. Daily operations, assets and processes live and are documented in digital systems, some of which aren’t owned by the organization. Assessing this ever-expanding technology footprint requires drawing data out of those systems. Doing so without automation, however, is time-consuming because it requires the corralling of disparate bits of data.
Automation can extract this data quickly and with much less effort and make it available for dashboards, reporting and modeling with analytics powered by AI. Enabling streamlined real-time access to this knowledge helps internal audit realign—or stay aligned—with the business as needs change.
At the same time, internal audit can be proactive for improved alignment. With deeper and wider visibility and analysis, internal auditors can prompt their companies to adjust KPIs and risk tolerance as needed with confidence.
2. Doing more with limited resources
Automation makes it possible to improve analytics and testing capabilities in a streamlined, scalable model that enhances audit planning and execution with existing resources. For example, automation makes it possible for you to review entire populations of data and perform targeted testing based on analysis rather than random sampling.
Another example is GRC tools, which generally automate the secure, centralized management and sharing of files across all three lines of defense. This improves collaboration and reduces redundancy.
Another powerful capability enabled by automation is the ability to test controls from a unified framework that maps each control and requirement to areas that need to be compliant. This reduces the amount of testing needed to gain visibility into the effectiveness of every control for every requirement.
Having these streamlined capabilities is becoming more critical as audit committee members’ expectations for internal audit continue to increase. They’re asking more questions and want detailed analysis to ensure risks are being adequately addressed through risk management and compliance.
The rapid evolution and complexity of modern business risks makes advanced technologies a necessity to effectively respond.
Stepping toward internal audit transformation
As valuable as these technologies are, they won’t solve your problems and fuel transformation on their own. You need to assess your current internal audit framework and incorporate business priorities into an achievable plan that includes training, if needed, as well as filling in skills gaps with services. Choosing the right technology vendors and implementing the right technology is also an important component.
Third-party consulting and implementation partners such as RSM can be key to a successful transformation. We advise clients on ways to collect, understand, examine and apply data to find more sophisticated patterns and trends. This helps organizations improve decision-making, insights and risk coverage in all phases of the internal audit.