The internal audit profession is undergoing a sea of change as technological advancements continue unabated, particularly around tech transformation. A PwC State of the Internal Audit Profession survey report, Moving at the Speed of Innovation, shows that many internal audit functions soon will be implementing transformational new technologies. The survey of more than 2,500 board members, senior executives, and audit professionals in 92 countries revealed that in the next two years, the portion of internal audit organizations will be as follows:
- Using self-service data extraction from financial or operational systems will increase from 74% to 94%.
- Using workflow/dashboarding/reporting tools within internal audit will increase from 53% to 85%.
- Using workflow/dashboarding/reporting tools shared cross-functionally will increase from 33% to 71%.
- Using governance, risk management, and compliance technology tools will increase from 23% to 62%.
The rapid advance of technology has had a profound impact on the practice of Internal Audit. Over the years, the ability to gather vast amounts of data continuingly has revolutionized the ability to perform complex internal audit analyses and draw valid conclusions. In this article, we will shed some light on 6 major ways advanced technology has revolutionized the Risk-based Internal Audit landscape.
Boosting Audit Efficiency and Speed
The first major benefit of digital technology is that it has vastly enhanced the efficiency of the execution of internal audit assignments Gone are the days when auditors have to spend hours poring over reams of numbers and transactions. Today, advanced data analytics technology has made it easier for auditors to process massive amounts of data, interpret information, and identify and present the audit results to their clients in a digestible format.
Digitalization has not only made auditing procedures faster and more effective, but it has also revolutionized the profession in a way whereby internal auditors have the enhanced ability to conduct complex analyses and draw valid conclusions in a matter of minutes rather than days or weeks. The time and resources that used to be wasted on routine matters and administrative tasks can now be redirected towards complex issues and more important areas of concern.
Fewer Data Constraints, More Control
If there is one great advantage of integrating technology and data analytics in auditing, is that sampling is no longer a restriction. Using data analytics, practitioners may examine the full population of data for anomalies, patterns, and areas of potential concern. Text analytics, data mining, and AI have all been used to identify relationships, trends, and anomalies that were previously missed by the human eye. These technological advancements have allowed more complex issues to be resolved in a fraction of the time previously required.
Modernizing The Internal Audit Experience
Another major benefit of digital technology is that it has allowed Internal audits to be brought into the 21st century. In the past, the only way to conduct an audit was to make a copy of the original paperwork and re-do it using old-fashioned methods. This was an extremely time-consuming and cost-intensive process and was ultimately inefficient. Digital technologies on the other hand help internal audit improve their performance leading to significant cost savings by automating rote tasks. This gives the auditor the peace of mind to focus on the more important parts of the audit process.
Facilitated Communication
Another significant benefit to the introduction of advanced technology is that the technology has made it possible for internal auditors to communicate more conveniently. Auditors can now share their findings and the data with the involved parties faster and more effectively. They are able to generate various kinds of well-organized and illustrated reports and documents within a relatively shorter period of time and with much less effort. Furthermore, cloud technology has made it much easier for auditors to safely store their data on a remote server and share it with their co-workers or other involved parties with ease and speed.
Improved Audit Information Security
Last but not least, digital technology has greatly enhanced the ability of internal auditors to secure their work environment. In the past, auditors were limited to performing their work on a computer connected to the network. With the advent of remote access technologies such as cloud computing, it is now possible to access data securely from anywhere in the world. This has enabled internal auditors to perform their work from any location, at any time, making it easier to complete their assignments and respond to clients’ needs in a timeous fashion.
In addition, state-of-the-art audit technology has increased the ability of internal auditors to protect the confidentiality of their work. As auditors perform more of their work online, there is an urgent need for keeping the highly sensitive documents and the data they contain safe and away from unauthorized access. The ability to securely transmit data and share sensitive information has been made possible through the use of highly advanced encryption software.
The Future Is Digital
The imminence of the rapid speed of technological change is upon us as internal auditors. But it does not stop here. With every passing day, more ground-breaking trends are seeing the light, giving cutting-edge technology a central role in shaping the future of the auditing industry. As we move forward into 2022 and beyond, disruption and innovation will become a norm. Our chances for success will be determined how we prepare for risk-induced disruption and whether we embrace innovation.
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