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Subject:The pivotal role of IT in the Internal Audit process

Internal Audit is a discipline currently undergoing radical changes. First, business models are constantly challenged by fast-paced technological innovation, digital transformation and the use of big data. Secondly, frequent and elaborate regulatory changes demand that Internal Auditors ensure risk is dynamically managed and effectively drives value for the organisation. Thirdly, high levels of governance, compliance and control must constantly be respected.

IT has the potential to help internal auditors respond positively but also creatively to the new challenges they face, and thus drive customer satisfaction, corporate performance and strategic alliances with other functions. With the assistance of IT, internal auditors are indeed empowered to:

  1. Pursue ‘Next-Generation Governance’, which involves increasing the focus on key risks, such as internal audit function’s strategy, organisational structure and better resource management. 
  2. Adopt ‘Next-generation internal methodology’ by focusing on data-driven and technology-enabled processes for continuous monitoring and high-impact reporting. 
  3. Achieve deeper and more valuable insights which in turn assist in addressing and managing current risks in a more proactive and more automated way.

Examples of IT technologies that enable such a transformation include advanced Data Analytics, Automated processes, Process insights, emerging Artificial Intelligence and Machine Learning, Data and Cyber-security and intuitive dashboards. What are their capabilities and potential?

Advanced Data Analytics help streamline the auditing process, and thus make it easier to manage. Therefore, the Internal Audit team can focus on more concrete business areas and execute their operational work more effectively. 

Automated processes improve performance and eliminate human errors by reducing highly manual tasks within the internal audit process.

Process insights leverage data to better understand processes at a deeper level and earlier in the audit cycle.

Data and Cyber-security, combined with cloud computing, are essential as it assures that the data are securely stored on cloud and can be accessed from anywhere, as opposed to paper-based audits, that might get destroyed or lost. 

Artificial intelligence, in particular Machine Learning and Deep Learning, enable internal auditors to automate and increase the effectiveness and efficiency of complex testing.

At implementation time, internal auditors should however bear in mind that, just like any electronic system, IT tools must be closely aligned with the organization’s business needs, comply with regulatory and legislative requirements, and be secured against cybersecurity threats and attacks. This requires selecting a provider that follows best practice processes and adopts leading-edge technologies that deliver outstanding innovation.
Learn more about the next-generation of eBOS tools for Internal Auditors here and contact us today for a consultation.