Moving at the speed of innovation

2018 State of the Internal Audit Profession Study

New technologies are revolutionising the way we do business, creating new products and services that are affecting markets and organisations. Boards and executives expect internal audit (IA) functions to be knowledgeable, able to advise them on emerging technologies and how the organisation should embrace them while managing the risks and implementing strong controls.

It’s no surprise that IA functions which help organisations manage the related risks whilst keeping pace with innovation themselves are considered to be adding significant value.

The list of technologies Internal Audit must understand is growing fast. PwC identified the essential eight emerging technologies expected to soon have significant global impact. And more are on the horizon.

Highlights

With the accelerating pace of technology-driven innovation, it’s hard to know exactly how Internal Audit’s capabilities will need to change in as little as five years. But one thing is clear: stakeholders will expect Internal Audit to keep up with the organisation’s needs.

  • 60% of UK respondents see IA as trusted advisers to the business in 5 years time.
  • 75% of global Evolvers add significant value.
  • 53% of UK respondents agree that failing to improve Internal Audit’s technology adoption will diminish their value to their organisation.
  • Today, 56% of UK stakeholders view IA as adding significant value, taking into consideration the level of investment.
  • IA’s innovation may have stalled because of poor data quality, lack of business technology, or other organisational roadblocks.
  • These challenges are quickly dissolving as CEOs pursue the opportunities inherent in powerful, new technologies.
  • To continue to play a valuable role in the organisation, IA must enlist innovative tools, skills, and methods for providing assurance.

The Evolver difference

Evolvers are leaning right into this technology-driven future. They’re using collaboration tools to increase their levels of organisational alignment and efficiency, data extraction tools and robotic process automation (RPA) to improve the expediency and coverage of their audits, and analytics, Artificial Intelligence (AI) and machine learning to offer innovative and value-added insights to the organisation.

Our study showed that 11% of UK IA functions (14% globally) are advanced in their use of technology. We refer to this group as Evolvers. Surprisingly, Evolvers are found not only in large organisations or regulated industries.

How are global Evolvers utilising technology effectively?

Evolvers are advanced in their use of IA’s technology foundation tools, namely those which tangibly affect IA’s processes and methodologies. The majority of global Evolvers have at least intermediate maturity in their use of the following tech tool categories.

  • 74% collaboration tools.
  • 84% data extraction tools.
  • 82% data analytics and monitoring tools.
  • 40% predictive and automation tools.

Moving technology and talent in step

  • 72% of Evolvers excel at attracting talent – securing training and sourcing talent they need. They build multi-year talent and technology strategies into their internal audit strategic plans.
  • 85% of Evolvers focus on technology enablement as part of their strategic plans. Most importantly Evolvers ensure their technology roadmaps are aligned to take advantage of the organisation’s broader technology efforts and investments.

A strong foundation helps Centrica Internal Audit extend its technology and talent reach

For three years, Centrica’s internal audit function has been developing its data analytics capability. Today internal audit is helping the organisation strengthen its second-line-of-defence capabilities advising on the development of a continuous-monitoring analytics process for the human resources team.

“By devising automated second-line capabilities, you avoid the need to have a separate team within that part of the organisation looking at the controls”

Carolyn Clarke, Head of Audit Risk and Control, Centrica plc

Evolutionary or revolutionary?

Evolvers’ solid foundation gives them the capacity to expand their risk coverage without equally expanding their resources. In addition, they’re seen as more innovative in technology, more collaborative with other lines of defence, and better aligned with stakeholder expectations when it comes to their scope and audit plans. Those characteristics increase their relevance to the organisation and its innovation agenda. 

Innovate and be revolutionary whenever possible

  • Rethink how to make a step change vs versus making incremental improvements.
  • Find ways to share or leverage others’ technologies and talents to leap forward.
  • Invest smartly today for tomorrow’s needs.

Contact us

Andrew Paynter
Partner, UK Internal Audit Services Leader
Tel: +44 (0)207 804 6085
Email

Geraldine Rutter
Partner, Regions Internal Audit Commercial Sector
Tel: +44 (0) 121 265 5111
Email

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