Overview
As financial services firms move into an increasingly technology-driven, innovation-oriented and disruptive future, it is only right that we also ask what is the future of internal audit.
For the most part, despite ongoing efforts to meet stakeholders’ growing list of needs, the answer is: playing catch-up. A common theme in this publication across the past couple of years has been the need for Internal Audit to adopt new tools and techniques and to develop capabilities needed to effectively respond to today’s challenges. However, it is equally important for Internal Audit to develop a coherent vision for both the profession and the function. Such a vision is essential in order to drive needed changes and prioritise initiatives for the function and the firm as a whole.
Through consultation with Audit Committee chairs, Executives, Heads of Internal Audit and audit teams, we have developed a blueprint which aims to clarify the expectations of Internal Audit, codifying the most important components which is Internal Audit 3.0 (IA3.0).
IA3.0 is Deloitte’s view of the next generation of Internal Audit. It is intended to act as a guide, focusing a function so that it is attuned to the challenges of emerging risk, new technologies, innovation and disruption and able to fully assist in safeguarding processes and assets as management pursues new methods of creating and delivering value.
IA's role
IA3.0 embraces innovative approaches that helps keep the function ahead of developments. Innovation positions Internal Audit to anticipate and then respond effectively to stakeholder needs and equips the internal auditors to address emerging risks in a helpful and impactful manner. IA should consider:
•Readily adopting various methods and tools such as Scrum and Kanban to ‘do’ Agile Internal Audit. IA also need to create an environment in which Agile can thrive.
•Automating core processes, using a combination of analytics and robotics in order to provide ongoing assurance, may be expensive. Where possible, IA can consider leveraging existing automation projects within the business.
•The internal audit function of the future, which needs a vastly different set of skills and capabilities to those of yesterday.
•Communicating clearly with its stakeholders to ensure they understand planned changes.