In the near future, the tasks and responsibilities of the Internal Audit function will change in order to offer more added value to organisations. The key question is how the current function can be transformed.

Internal audit is becoming increasingly important

Due to the increasing number of multidisciplinary internal audits and the trend towards strategic themes, the need for assurance on more complex subjects is growing. Simultaneously, no mistakes can be made in financial processes or in the area of legislation and regulations. Coordination with second-line functions and external auditors will also increase as a result. On the one hand, this will enable internal audit teams to take stock of how the organisation itself is optimally 'in control' and can organise its own 'assurance' and, on the other hand, to determine which tasks and roles (internal and external) assurance providers can take on.

How technology improves the Internal Audit function

As technology has become indispensable and more strategic than ever before, boards and audit committees are increasingly relying on technology-enabled internal audit as an independent and objective test to assess strategic risks.

Directors of organisations responsible for governance need technology-enabled internal auditors to work with management to ensure that risks are properly managed. This can be achieved through the increasing use of robotic process automation (RPA) or artificial intelligence (AI) to support business process optimisation, the use of cloud technologies or the implementation of a cyber strategy to combat prevalent and emerging threats.

Three pillars of credibility and trust

Internal auditors using technology need to build credibility and trust with stakeholders to meet the increased expectations of executives. This starts with addressing these three pillars of credibility and trust:

Organisations are investing in new technologies that are developing at an ever-increasing pace. Internal auditors must be technically very competent and have good knowledge of the technologies used by the organisation. They must also be able to translate new technology risks into business risks in order to have the right conversations with management and board members.

As organisations change rapidly and increasingly use agile processes, such as continuous integration/continuous delivery (CI/CD), mobile technologies and remote workers, internal auditors need to think differently about how they deliver their assurance and advisory services. This includes the need for internal auditors to adopt new methodologies, including quick scans and short audit cycles, that are aligned with the operational process.

Organisations are rapidly digitising their business operations. As change accelerates, the internal auditor must be able to adapt and work in real time. Management needs the independent assessment of technology-enabled internal audits on these strategic initiatives before making large investments in ineffective programmes or potentially introducing new risks. Internal auditors must provide insights beyond control deficiencies and use data to identify and report on real-time problems.

How KPMG can further optimise your internal audit functions

Setting up, designing and assessing the Internal Audit function (IAF)

Omdat iedere organisatie haar eigen specifieke kenmerken heeft, hangt de inrichting van de IAF in hoge mate af van de ambities, omvang en kwaliteiten van de organisatie. Met gebruik van world class benchmarks, IIA-standaarden, kennis en ervaring – bijvoorbeeld inzake data-driven internal audit, soft controls en continuous auditing & monitoring – helpt KPMG organisaties hier een pragmatische invulling aan te geven. Van quality assurance-reviews tot en met het klaarstomen van de IAF voor de toekomst.

Co- or outsourcing the Internal Audit function

In today's dynamic world, it is no longer possible for organisations to have sufficient knowledge and experience in all substantive areas to carry out all internal audit activities themselves. In addition, there are many costs involved in maintaining the correct level of knowledge and training. Internal Audit as a Service offers various options to support your organisation and to give you new insights into your processes and your level of control thereof – for example, by carrying out process or theme audits, by coaching, by helping to set up the Internal Audit function or by calling in one of our support specialists: a Subject Matter Expert.

Deploying the right technology for the Internal Audit function

We have transformed our internal audit practices to integrate technology-enabled internal audit (TeIA) concepts. We have a library of best practices associated with staff training, templates, routines, frameworks of analysis and applications, amongst others, with which our professionals are constantly kept up-to-date on recent developments.

Following the TeIA roadmap, KPMG can work with internal audit directors and audit committees in developing a TeIA function that delivers strategic business assurance, identifies business opportunities, and enhances organisational value. Read here {Link IN TEXT} our vision on the impact and value of technology for the Internal Audit function.