January 21, 2020 All Industries
Internal audit is grappling with the whirlwind of technological change — everything from blockchain to artificial intelligence to digital transformation. What use is internal audit in an age of such revolution? It turns out, a lot.
The internal audit department is increasingly involved in the rapid technological changes occuring at companies. The department can provide value in new ways, too.
KPMG believes that digital transformation, including the rapid deployment of technologies such as cloud computing, is a key area where internal audit can provide value. Internal audit can provide assurance in the implementation and roll-out of cloud computing as well as assessing contract compliance with IT security standards. If the company has an overall digitization strategy, internal audit also can provide assurance that the strategy is on track and meets business objectives.
Third-party vendors and subcontractors elevate risks for any company. Internal audit should get involved in assessing third-party cybersecurity providers, including service level agreement contracts. Internal audit also should have the ability to provide penetration-level testing to look for IT weaknesses.
“To successfully adapt, internal auditors will need to embrace technology like never before,’’ writes Richard Chambers, the president and CEO of The Institute of Internal Auditors, which also provides training.
Deloitte suggests looking at enterprise-wide use of technology as part of the strategy of the organization. “Internal audit should look beyond the risks of individual transformation activity, and also focus on the overall portfolio management,” Deloitte writes.
Internal audit also should seek to understand the risks of disruptive digital and cloud technologies, balancing risks and benefits in a competitive landscape as well as the impact on customers, stakeholders and employees.
If that wasn’t enough, blockchain may be a new area to learn in the next several years. Crowe has a helpful guide for internal auditors looking to beef up their blockchain knowledge.
While companies are increasingly adopting transformative technology, audit departments are considering the possibility of using technology to improve audit operations, too. Deloitte details some of the opportunities in automation for internal audit, including helping to improve audit quality and reduce manual tasks.