In the early 2000s, the typical focus for internal audit teams was to complete traditional cyclical audits of specific financial and operational areas – a process often disconnected from the organization’s more significant objectives. Today’s internal audit function has undergone a complete transformation. Internal audit teams are expected to be heavily involved in assessing the risk management function and act as value-adding advisors in nearly every aspect of an organization’s operations. Internal audit teams need to free up their time and resources to focus on higher-level strategy development and critical thinking to keep this valuable seat at the table. Technology can automate data analysis, offer real-time insights and allow you to drill down to risk and control processes. However, adopting it cannot be easy. Here are seven ways organizations can integrate technology into their internal audit processes:
1. Obtain Buy-In From Leadership & Align Strategies
In many internal audit departments, technology issues get delegated to someone with good technical aptitude. But that person may need more authority to lead a technology transformation. Adopting new technologies is only possible with senior business leaders’ buy-in and strategic vision. When implementing new technology, the direction of the audit leader should be aligned with the directives of those responsible for risk management, internal control, compliance and fraud detection. Outlining a cohesive strategy ensures alignment across teams and functions.
2. Set Goals & Measure Progress
Technology adoption doesn’t just happen. It needs to be managed. Obtaining proper funding, finding the right resources and developing a means to measure progress is essential. Leaders should define and establish objectives, plans and schedules and identify critical milestones. Then, appoint the right people to implement the strategy and achieve those goals. A change agent leads the most successful internal audit technology initiatives. These agents have the authority, knowledge and strategic understanding to drive effective technology transformation. Audit leadership is critical to communicating the technology strategy and objectives to the C-suite and audit committee stakeholders.
3. Align Technology with Strategic Objectives
Technology growth in areas like artificial intelligence (AI), machine learning, robotic process automation (RPA), cloud, software-as-a-service (SaaS) and big data affect how organizations operate. Internal audit departments have a massive opportunity to benefit from these shifts. When choosing a technology solution, consider what’s essential for the internal audit team. How do they operate now, and what challenges can be solved? Most importantly, look ahead to the future. Consider how this team will be expected to work in three to five years, the organization’s strategic objectives and how the chosen technology will help meet them.
4. Map Your Internal Audit Processes to Find Where Technology Fits
Look at the key components of the internal audit process and consider how they work together. Software should support your operations seamlessly, consistently, and intuitively with one solution that combines all those audit processes and functional areas. Employee resistance to change can be a significant obstacle to achieving better audit processes. That’s why it’s unrealistic to expect a breakthrough in internal audit performance by continuing to rely on various generic software tools simply because “that’s the way we’ve always done it.
5. Get Rid of Operational Silos
Internal audit must remain an objective and independent function to do its job effectively. But it shouldn’t operate in a technology silo. Internal audit processes connect to other functional areas, particularly governance, risk, and compliance (GRC). Consider how to audit departments and other functions should be involved in identifying and assessing risks Testing controls and adhering to regulations Monitoring transactions Flagging and investigating exceptions Sharing and responding to findings and reports Reviewing, monitoring, and using dashboards, Cohesive technologies and systems encourage cross-functional collaboration and result in greater efficiency and cost savings for the company.
6. Embrace Data Analytics
Too often, data analytics is treated as an “add-on” to the audit process — used sporadically and inconsistently — instead of as a core strategic component. Purpose-built audit management software is driven by data analysis, helping to facilitate everything from initial risk assessment and audit planning to detailed control testing and continuous auditing. It’s also valuable for exception management and quantified findings and reports. Data analysis is integral to a transformed audit process, influencing quantified risk assessment and continuous monitoring.
7. Drive Your New Technology-Centric Vision
Adopting new technology is essential for transformation, competitiveness, and success in virtually every business area. But many internal audit departments must embrace technology and take advantage of its benefits. Internal audit must become the driver of adopting value-added technology and modeling tech adoption in other GRC areas. It’s also the key to steering a technology-driven GRC strategy throughout the organization. To make substantial changes in internal audit contributions and effectiveness, audit management must consider adopting new technology to transform its processes.
Enhance Your Internal Audit With New Technology
Technology has the power to build the value of internal audits, foster executive alignment, and create relevance to the C-suite. But this can only happen after effective adoption. Get organizational buy-in, set goals to measure progress, and map the current IA flows to see where the technology may benefit. This new tech will break down organizational silos and allow the organization to analyze data like never before. The future for internal audit teams includes purpose-built technology to streamline insights, risk assessments, and performance management.
Find out how Audit Management from Diligent can help optimize these processes and more.