Using Tech-Aware Audit Function To Ensure Compliance And Accuracy

Introduction To Tech-Aware Audit Functions

Building a tech-aware audit function is crucial for ensuring compliance and accuracy.

This involves leveraging cutting-edge technologies such as advanced analytics, artificial intelligence (AI), and cloud computing to enhance audit processes. The integration of these technologies allows audit teams to become more agile and responsive, providing sharper risk assurance that meets the demands of risk assurance boards and the C-suite.

The journey to creating a tech-aware audit function is transformative. It requires moving away from manual approaches to compliance and control testing and embracing automated monitoring. Recent trends highlight the importance of cybersecurity audits, data analytics, and AI integration in internal audits. For instance, in 2024/2025, there is a significant emphasis on cloud security and AI-driven audit solutions, which can analyze financial records more accurately and efficiently than traditional methods.

Still, what’s the roadmap to get to this tech-aware audit function?

Technology Changes That Must Happen

First, audit functions must move away from time-consuming manual approaches to SOX compliance and controls testing and toward automated monitoring. Part of that is due to specific financial reporting challenges, like the accounting standard for revenue recognition. Another factor is organizational complexities like merger integration or outsourced business processes. Audit firms are under pressure to be more skeptical and demand more data, which is another cause.

The necessary technologies, RPA, advanced analytics, data visualizations, and machine learning aren’t secrets. But they are still relatively low on the adoption curve. In the Protiviti survey, 11% of respondents use RPA, 8% use advanced analytics and visualization, and only 2% have implemented machine learning.

That means there is tremendous future potential for internal audit functions to transform their risk assurance capabilities. But, yes, we still have lots of groundwork to do today to build the foundation.

For example, robust data governance becomes crucial if we want to build a world of diverse data analytics. Audit leaders must work with business process owners in the first and second lines of defense to define the data created in a digital business process.

Audit leaders will also need to work with business units on automating the extraction and migration of enterprise-wide data from business systems into the preferred analytics or RPA tools.

“We know how to build a better audit function, but we haven’t codified how much trust other stakeholders can put in the results.”

Team Changes That Must Happen

The adoption of these new technologies is generally low because audit teams don’t know what to do with them. The technologies are dazzling, but how can an audit team of real people monitoring real risks thoroughly exploit them?

That’s going to require thoughtful planning and incremental change. Audit leaders must bring together people with expertise: data analysts, business process users, and cybersecurity professionals. These skills must then be converted into reliable audit practices that will deliver assurance to the board.

Rush headlong into that effort, and all sorts of mistakes could arise. For example, a business risk might be misunderstood, leading to an automated process that doesn’t generate the correct data. That’s the fundamental challenge: these technologies will operate at tremendous speed from whatever starting point you place them. So, identifying the right risks and objectives and developing the best audit procedures using those technologies is critical.

A key trend in 2025 is the emphasis on stakeholder collaboration, where internal auditors work closely with IT teams and compliance officers to ensure that audit processes are aligned with organizational goals. This collaborative approach enhances the effectiveness of audit functions and fosters a culture of transparency and accountability.

Governance Changes That Must Happen

As audit functions become more tech-aware, governance structures must evolve to ensure the reliability and effectiveness of new technologies. This includes establishing standards for AI-driven audit tools and determining how external auditors can gain comfort with these technologies. The Public Company Accounting Oversight Board (PCAOB) is exploring the need for audit standards in this area, but clear guidelines are still pending.

In 2025, regulatory technology (RegTech) is also playing a crucial role in enhancing compliance and risk management processes. This involves leveraging technology to streamline regulatory reporting and ensure adherence to evolving compliance requirements.

How Success Looks In The Tech-Aware Audit Function

Above all else, a board of directors wants to preserve the organization’s ability to create value. The implicit assumption there, however, is that the organization can recognize what a threat to that ability looks like and respond accordingly.

That’s risk awareness. For that matter, Boards, senior managers, and business operations leaders don’t just want confirmation that business activity is efficient or complies with the law. They want to know that the organization can respond to changing business conditions quickly, if not immediately.

Recent statistics highlight the growing importance of technology in audit functions. For instance, a KPMG survey found that 80% of organizations believe AI will significantly impact their audit processes in the next few years. This underscores the need for audit leaders to stay ahead of technological trends and ensure that their teams can effectively leverage these advancements.

The technology exists for IT auditors and internal audit leaders to build that risk-aware capability, and the audit function itself is supremely well-suited to the job. It will take competency and deliberation, magnified by technology. Regardless, this future is coming.