EMBRACING THE NEXT GENERATION OF INTERNAL AUDITING
Most organizations have started their journey and anticipate significant progress over the next two years, according to the results of Protiviti’s 2019 Internal Audit Capabilities and Needs Survey.
Now is the time to commit to the journey to evolve into a next-generation internal audit function. While this may be a long journey marked with significant challenges and undoubted setbacks , it also will be an exciting transformation with great rewards for our internal audit teams and the stakeholders we serve.
We first issued this mandate in our white paper, The Next Generation of Internal Auditing – Are You Ready?, detailing why and how internal audit functions need to perform their work in a more agile manner and how they can leverage the proliferation of data combined with technology-enabling auditing solutions to deliver on this truly transformational objective. As Brian Christensen, executive vice president, global internal audit for Protiviti, asserts: “There needs to be a fundamental rethinking of the design and capabilities of the internal audit function to be more forward-looking and help improve the business.”
This mandate is underscored in the latest results of the Executive Perspectives on Top Risks survey from Protiviti and NC State University’s ERM Initiative. Based on a global survey of board members and C-suite executives, the top risk for organizations in 2019 is concern about existing operations (of which internal audit is a key part) not meeting performance expectations and competing against “born digital” organizations.
The result of our 2019 Internal Audit Capabilities and Needs Survey, in which we take an in-depth look at the adoption of next-generation internal audit competencies such as agile auditing, artificial intelligence (AI), machine learning (ML), robotic process automation (RPA), and continuous monitoring, among many others, provide a detailed assessment of how internal audit groups are progressing on their next-generation journeys. Our insights further amplify the call to action we broadcast in our white paper.
It’s encouraging to see that most internal audit functions have launched innovation and transformation activities, starting next-generation journeys. However, more substantive progress is needed in a number of areas if early-stage next-generation internal audit models are to mature and fulfill their massive potential. Undertaking this journey requires a recognition that transformation consists of more than a collection of discrete activities; becoming a next-generation internal audit function requires a new mindset and a commitment to continual evolution. Some internal audit groups are ahead of the game, including most of those that reside within companies considered “digital experts” and “digital leaders.” Among other practices, digital leaders are far more likely than other organizations to appoint internal audit innovation/transformation champions.
Also in this year’s study, we take a broad look at overall priorities for internal audit functions, including their top audit plan priorities.