Internal audit stands at a critical juncture.
The disruption of the past year has created an opportunity for the profession to evolve and position for an increasingly influential role.
Blogs John Reese Apr 13, 2021
Several factors make this a pivotal time to equip auditors with the skills and technologies to anticipate and manage new and emerging risks — and significantly contribute to the decisions and success of their businesses in a rapidly changing world.
The expanding risk landscape creates a growing opportunity for internal audit to reach further. The uncertainty of the past year is expected to persist, as 81% of 5,000 audit and risk professional respondents say risk will continue to be dynamic and unpredictable in 2021, according to an AuditBoard survey.
The realities of a fast-shifting workplace also have driven necessary underlying change. The pandemic has accelerated digital transformation and the use of cloud technologies, which have pushed companies to be creative, innovate, and disrupt existing ways of doing business.
As cloud technology makes risks more measurable and tangible, organizations will be better able to determine an accurate upside for risk and encourage a healthy risk appetite that balances risks and rewards. To take advantage of the new possibilities and changes related to cloud technology, internal audit will need to get creative. Auditors should no longer just provide assurance over the typical audit universe, but also learn new technologies, understand enabling innovation, and be the organization's eyes and ears to identify risks and trends.
Cloud technology brings expanded capabilities for internal audit departments, increasing collaboration within internal audit and across the organization, streamlining communication, and boosting productivity. It is anticipated that internal audit's ongoing digital transformation will rapidly accelerate in 2021 as auditors embrace the opportunity and efficiency that cloud-based solutions offer.
Twenty-two percent of audit teams plan to implement cloud-based technology in 2021, according to a report by the Internal Audit Foundation (IAF) and AuditBoard, Internal Audit's Digital Transformation Imperative. Other recent IIA research has found that current cloud adoption in internal audit is just 20% of the market. So while the accelerated adoption in 2021 is a major step forward, this adoption rate still puts internal audit behind other enterprise functions like IT, which is projected to hit a 59% cloud adoption rate in 2021, according to an IDG survey.
As we approach a post-pandemic world, the IAF/AuditBoard report indicates that audit leaders are moving to the cloud to help them better navigate the complex risk environment, stay on top of expanding regulatory requirements, and enable much improved collaboration across their distributed workforces.
Empowering the internal audit function to streamline and automate processes leveraging modern technology is a critical step in advancing internal audit maturity, but it's not enough to drive the kind of change that's possible in today's environment. The audit team and individual practitioners must develop modern audit skills to maximize influence and potential. Understanding the fundamentals of audit management, risk management, agile practices, data analytics, and IT systems is becoming foundational, especially as more business processes are integrated with the cloud.
As big data increases in importance for today's organizations, internal auditors must know what makes the business tick to provide assurance over big data concerns, including significant related risks. The current wave of digital transformation is creating an ever-greater need for reliable assurance within the IT space. The ability to gather, understand, and analyze data is a critical driver of organizational success. Now is an opportune time for internal auditors to grow their skills and knowledge in key areas to contribute in greater ways to the performance, compliance, and resilience needs of the organization.
Internal auditors have more opportunities than ever to access information and grow skills. The IIA's training resources are second to none and provide a wealth of topics and tracks to help practitioners pursue growth in any area of interest.
There's also a unique scholarship program in place to help auditors in need. The IIA and AuditBoard have partnered to offer the Elevate Internal Audit Scholarship, which provides the means for internal auditors to develop the next-generation skills to meet the challenges of the dynamic risk environment ahead. The program provides access to cutting-edge training and professional certifications for internal auditors who have experienced a layoff or furlough due to the economic pressures of the past year.
One scholarship recipient, Curtis Clapham, improved his skills with the Elevate Scholarship custom curriculum on his way to secure his current role as an audit manager at Visa. "The Elevate Scholarship program offered me the opportunity to revisit previously examined topics, such as ethical behavior, and exposed me to new areas, including auditing culture, during my transition from one role to the next," Clapham says. "The program provided true professional development — a spectacular learning opportunity designed to keep audit professionals on-point."
Today's internal audit career requires addressing globally relevant, emerging risks from an organizational perspective while applying modern technology to enable enhanced processes, insights, and collaboration. As audit teams increasingly embrace cloud technology to streamline and automate their operations, it's also crucial to invest in corresponding skills for individual team members. When auditors are given the resources and opportunity to position themselves with the skills they need to stay current, they'll be prepared not just to identify risk impacts, but also potential opportunities to help their organizations grow and succeed in a rapidly changing environment.
John Reese is chief marketing officer at AuditBoard based in Cerritos, Calif.