Future-ready audit: Leveraging technology to embrace a more strategic role
With new organizational risks always on the horizon — especially around ESG, cyber resilience, human capital management and even directors’ personal liability — boards need all the support they can get.
The audit committee can help alleviate these pressures by covering more rigorous financial and compliance demands, which require a deep understanding of complex issues in order to make informed decisions.
However, this means that the internal audit team and the Chief Audit Executive (CAE) must also evolve their practices and technologies to deliver the clear, real-time insights the audit committee needs to make confident evaluations.
Audit’s increasingly strategic role
Gone are the days of internal audit being solely a compliance function. Boards today want internal audit leaders to step into the role of strategic partners and provide valuable insights into risks, revenue opportunities and overall business performance.
Most CAEs are eager to step up to the plate. But this increasingly strategic role presents three fundamental challenges:
- Broader responsibilities: Boards are looking to internal audit to provide guidance on new and rising demands: 9 in 10 CAEs say they will cover ESG principles, and half say climate and sustainability are an important focus. At the same time, new regulations — including the SEC's forthcoming climate and cybersecurity disclosure rules — present a bigger challenge than ever. Moreover, moving from reactive compliance reporter to proactive advisor adds profound gravity to every internal audit output.
- Speed and agility: As firms prioritize speed and agility, leadership needs audit teams to stay ahead of rapidly shifting needs. Internal audit reviews happen more frequently, and even continuously: KPMG reported that 60% of internal audit teams now perform risk assessments semi-annually, quarterly or even more frequently. As continuous risk assessments replace annual audit activities, audit leaders must be able to provide on-demand visibility and real-time insights across the entire risk landscape.
- Doing more with less: The escalated and expanded role of internal audit rarely comes with a commensurate increase in budget or staffing. They’re under pressure to expand accountability, make ESG meaningful and keep pace with increasing regulations while controlling compliance costs. Boards expect internal audit to help support accelerated innovation to keep the firm ahead of market disruption, while mitigating growing cyber risks and helping the firm tighten up in the face of economic uncertainty. In short, internal audit teams need to find ways to deliver more value in less time.
4 ways technology can power more agile internal audit teams
Most internal audit leaders are looking to technology for help in efficiently and effectively meeting growing demands as they embrace this more strategic role. Indeed, a recent KPMG survey showed technology is a top area of investment for internal audit.
Here are four key ways internal audit teams can leverage next-gen audit technology to drive efficiency while unlocking new and better strategic insights more quickly:
Centralization
Roughly one-third of CAEs believe they have access to all the information they need to extract accurate insights and take confident business actions. The first step in modernizing audit infrastructure should be to implement a platform that provides a single, centralized source of truth. Centralization is the foundational step toward all the rest, enabling audit teams to:
- Manage all audit programs from a central “command center”
- Store all documentation and evidence in a single, highly accessible location — including a library of past audits, workflow templates, customized work papers, and risk and control matrices
- Execute all planning, fieldwork and audit procedures — and build and deliver findings and recommendations — from a single platform
- Integrate audit analytics to synthesize vital insights from a comprehensive, real-time data store
These centralization advantages ultimately help internal audit teams stay organized and aggregate assurance across the organization’s overall risk and control framework to rapidly highlight areas of concern — while reducing duplication and repetitive tasks to cut down overall workloads and process audits faster.
Automation
Centralization enables another crucial aspect in modernizing the audit infrastructure: automation. Modern audit platforms leverage advanced AI and machine learning (ML) to deliver highly automated workflows and automation-driven functional advantages, including:
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- Standardized templates and reusable risk and control libraries
- Automatically deployable and trackable audit questionnaires, with the ability to easily capture evidence and make in-line citations
- Automated workflows to manage requests and responses from control owners across the organization
- The ability to quickly plan, schedule and assign audit plans and manage them through to completion
- IIA-recommended methodology and best practices built into programs and processes
In short, automation empowers teams to conduct more audits in less time, and allocate their resources more effectively to deliver more strategic insights.
With preconfigured programs, internal audit teams can stay up to date on evolving audit standards and regulations, eliminating the need for manual research across multiple systems. Furthermore, mobile capabilities (enabled by automation) enable auditors to work flexibly from any device and at any stage of the auditing process.
Visibility
Audit leaders need to understand key performance indicators (KPIs) and emerging risks in order to exercise objective oversight and guide leadership through critical business decisions.
Broad and deep visibility traditionally requires manual, time-intensive reporting to pull together information from internal audit processes, systems and data sources.
Tech-enabled audit platforms combine centralization with automation and analytics to deliver AI-powered audit dashboards and real-time reporting tools, enabling internal audit teams to:
- Get real-time visibility into both individual audits and overall strategic performance, so they can accurately communicate progress
- Pinpoint and prioritize risks through drill-downs into status, findings, audit logs and more
- Respond to ad hoc audit committee requests with real-time risk assessments and analysis
- Connect audit reports and findings to top-level strategic objectives and business risks
This reliable visibility into critical data ultimately empowers internal audit leaders to make informed decisions and identify high-priority risks that require immediate attention.
Continuous assurance
One of the most vital changes that comes with a more elevated, strategic role is the board's expectation that internal audit not only report on identified risks and issues, but also detail and measure progress toward remediating those issues.
Internal audit teams have traditionally lacked a clear methodology for measuring this remediation progress. Ad hoc protocols typically rely on inefficient and error-prone manual processes. As audit teams are all too aware, identifying issues is just one part of the job. Teams must also monitor progress and remediation — activities currently rife with inefficient manual processes.
Modern audit technology accelerates performance and risk monitoring, automating control testing, and delivering continuous assurance, while freeing up auditors for more strategic work. Internal audit teams can leverage these technologies to:
- Track and automate real-time KPIs/KRIs
- Automatically test controls against standards and regulations and monitor them in real time
- Track, remediate and report on deficiencies, issues and findings
- Automate action plans and assignments for follow up, with the ability to cite evidence directly within the platform
- Analyze transactional data in real time to detect leakage
- Enable collaboration, escalation and reporting on issues and deficiencies
Modern audit technologies unlock critical insights — and proven value
As internal audit continues to play a broader, more prominent and strategic role in advising the board, audit committees expect internal audit leaders to step up to meet higher-level demands. Audit leaders need to align audit practices with the business’s strategic priorities, embrace ESG hurdles and prioritize crisis management readiness, to name just a few of the emerging challenges.
The solution is not technology alone: Internal audit leaders need to turn their focus inward, demonstrating the internal audit organization's fitness and working to build strong relationships with stakeholders in order to drive effective cross-functional workflows.
But modern audit technologies are proven to deliver the enhanced reporting, analytics and streamlined processes that internal audit teams need to meet rising expectations and enhance their strategic role within their organizations.
By adopting these technologies and taking a proactive approach, internal audit leaders can deliver the invaluable insights the audit committee needs, elevating their role by fostering confidence and trust among the board and stakeholders.
See modern audit management technology in action
It’s one thing to outline key capabilities and theoretical functionalities. It’s another to see them come to life in practice. Forward-thinking audit teams are already using Diligent Audit Management to gain centralized, real-time visibility, consolidating audit functions to make more integrated and informed decisions. They’re leveraging built-in audit analytics tools to pull key signals out of the noise, and purpose-built reporting tools to connect with stakeholders and always be board-ready.
See what a truly modern, integrated and AI-powered audit management platform looks like — get your demo of Diligent Audit Management here.
