Foresight is a skill internal auditors need to master in today's disruptive business environment.
Why is it so important for internal auditors to add foresight to their job description?
Stewart Disruptive technologies and the trends impacting business are expected to intensify in coming years, making markets even more dynamic, competitive, and opportunistic. Successful organizations will need to be agile and accelerate their decision-making in an environment where prolonged periods of rapid change will be the new norm. Internal audit will have an opportunity to help management better evaluate its preparedness to deal with future events and the “what if” scenarios that will most likely impact the business. If successful, internal auditors have an opportunity to inform and shape the critical decisions that their management teams must make. The reality is that most professions — internal audit included — are about to go through tremendous change. Many internal audit functions will need to transform themselves to provide foresight and serve in this new capacity. The real question is whether those currently in the profession will recognize the opportunity, prepare themselves, and rise to the occasion or whether the transformation will be led by an influx of new talent who may be viewed as more equipped to embrace change. I suppose it will be a combination of both, and each of us will decide our future to the extent we are willing and prepared to embrace change.
Pundmann The No. 1 thing I hear from key internal audit stakeholders — namely, chief financial officers, audit committee chairs, and CEOs — is they need new chief audit executives (CAEs) to come into their roles ready to not only provide assurance, but also to advise and anticipate risks. Internal audit must be proactive. That said, assurance activities are critical, and we’re seeing more capabilities like automated assurance help internal audit do block-and-tackle analyses of control effectiveness. Taking those learnings, analyzing them, and using them to identify risks before things actually happen is what sets standout, forward-thinking internal auditors and CAEs apart from the rest.
Pundmann It’s important for internal auditors to take what they’re seeing from a historical perspective and apply it to the future of the organization. If they can identify an emerging risk or trend early and communicate that insight to stakeholders, they can help the business gain competitive advantage. Whether an organization is launching a new product or service or implementing a new technology system, internal auditors should be involved early to assure appropriate steps are taken, anticipate risks, and advise on controls and processes. Things change so fast — it’s important to ensure necessary capabilities and controls are built into major efforts long before launch time, and the organization maintains a regular pulse throughout the planning.
Stewart Internal audit professionals must become more aware of, and educated on, business trends, disruptive technologies, the movements of competitors, and alternatives and must be able to anticipate forward-looking risks. This will require greater industry perspective, stronger interactions between internal audit and the business, greater leverage of subject-matter experts, and advanced risk identification techniques. Internal audit must shift from the traditional and conventional to being more strategic and focused on what might impede the organization’s most important business objectives.