The exciting future for the internal audit profession has arrived but are we ready to seize the opportunities it brings?
The internal audit community has been pondering about what the future of internal audit would look like. Well, in my view, it depends on the nature of the business, the complexity of the business, the business model and the overall risk profile. As the business evolves, the internal auditors need to be agile and keep pace with these changes to be relevant and seen as trusted business advisors. Therefore, the complexity of the business and the fast-changing risk landscape drive the skills required to strategically align with the fast-changing business landscape.
This complexity requires the internal audit function to reimagine the internal audit value proposition and rethink how to approach assurance, enterprise-wide risk management, and compliance. The reality is that technology is moving at pace, impacting ‘risk velocity’ where agility in sensing, learning, analysis, and response is a key game changer to remain competitive and relevant in the market. We are also in an era where we need to embrace emerging technologies as we are now well into the Fourth Industrial Revolution (4IR) where new technologies, digitalisation, robotics, and artificial intelligence are the new norm and are dramatically changing the business landscape. The adoption of continuous monitoring techniques by broadening the focus from detection, based on past results, to also predict control failures and risk triggers in real time, is key. Implementing an advanced data analytics platform that monitors key risk indicators throughout the organisation enhances risk management and protects the organisation and its clients.
The internal auditor of the future is not only about being tech savvy, but also innovative, creative, purpose-led, and resilient. The key game changer is that the internal auditor of the future does not necessarily possess the traditional auditing skills and qualifications but possesses specialist skills and deep expertise that enables the internal audit function to keep pace with business − that is, auditing at the speed of business and positioning internal auditors as value creators, not ‘cops’. This will drive impactful reporting on key business insights that enable sustainable and value-adding business improvements. Value can be added or created through strategic alignment with the business objectives, the adoption of agile auditing to respond to new and emerging risks, and producing reports that are clear and easy to understand. Many in the profession would argue that this ‘future’ has long arrived and we, as internal auditors, must be change-resilient.
The internal audit function of the future is purpose-led, agile, human-centred and digitally savvy to be best placed to add value and protect the organisation and its stakeholders. We must move with the times and be responsive to business changes, current risks, emerging risks and the 4IR. The unprecedented crises, disruptions and competitive pressures placed on organisations require an ongoing need for strategic and operational transformation. We are no longer dealing with single ‘black swan’ events but ‘flocks of black swans’ converging at the same time, resulting in a ‘poly-crisis’ or multiple risks manifesting at the same time. In addition, many of us are grappling with new ways of work, including hybrid work models, and how to remain relevant, engaged, and trusted business partners.
As organisations respond to these disruptive forces, internal audit functions are evolving their approaches to not only deliver assurance to stakeholders, but to provide relevant, independent, and credible advice on critical business issues and better anticipate risk. To be a trusted business advisor in an organisation you need to have the right people with the right skills and attitude to deal with the changing expectations of your key stakeholders. Without a mindset shift and the application of new approaches and technology enablement, the expectations of these stakeholders will not be met.
The exciting future of internal audit has arrived and it’s incumbent upon us to be a key player in enabling organisations to survive and thrive in volatile and uncertain times. It’s imperative for internal auditors to be curious to learn new and relevant skills, possess deep domain expertise and relevant commercial acumen to keep pace with the rapid changes in business, technology, and data, and ultimately be the trusted business advisors that create value for the organisation.
Mbali Precious Mabaso CA(SA), Audit Portfolio Manager: Governance and Shared Services (Nedbank Group Limited) and Founder and Mentor: Isikhuthazi (Mentoring Initiative for Aspiring CAs(SA))