International Internal Audit Awareness Month

What do Internal Audit best practices look like in the post-pandemic, digital age, and why is internal audit awareness so important?

With many of the world’s industries undergoing significant digital transformation, and mitigating against risk going increasingly cyber, Internal Auditors have been catapulted to the fore as a bulwark against mis-governance, risk, and business misalignment.

Photo by IIA

This only brings more attention to International Internal Audit Awareness Month, which is held every year in May to put focus on the valuable work Internal Auditors do.

What is International Internal Audit Awareness Month?

Internal Audit Awareness month is summed up by the founders of the campaign, the Institute of Internal Auditors:

“(It’s) a time for Internal Auditors around the world to share examples of how the profession provides value to organisations, spotlight the profession’s commitment to good governance and risk management, and explain how Internal Auditors protect the public interest”.
“With new risks, opportunities and regulations emerging every day, Internal Auditors have a tremendous opportunity to guide their organisations through historic change”

This really sits at the heart of International Internal Audit Awareness Month – how Internal Auditors, and internal auditing processes, respond to change, and how they raise awareness of their work to guide businesses (and the wider public) through the hard work of pivoting operations in new, safe and sustainable directions.

The Future of Work and Internal Audit

Photo by Avi Richards, on Unsplash.

In a post-COVID world of remote work, AI domination, increased cyber-threat and rising ESG commitments, the work of internal auditing is never done.

So we thought we’d raise some internal audit awareness of our own!

In this blog we’ve put the spotlight on some internal audit best practices, and highlighted where and how Internal Auditors are changing the world.

Internal Audit Stakeholder Engagement and Trust

Photo by Cytonn Photography, on Unsplash.

“Organisations have, as a result of sheer necessity, made decisions faster, collaborated better, and adopted new technologies faster”.
“Organisations should go beyond reactive defence and passive compliance to actively anticipate risks and opportunities, and detect system failures before it’s too late”.

As KPMG’s report The Future of Internal Audit succinctly puts it, one of the main pillars of effective internal audit is prioritising stakeholder engagement, and understanding the real value of cross-organisational trust.

Internal audit teams have always needed an open forum to go about their business, but in 2023 (and especially during International Internal Audit Awareness Month), this open forum needs to be built around trust and how that trust works to improve strategic alignment and legal compliance.

Specifically, we’re referring to alignment across departments managerial functions, and critical engagement touch points to guarantee sustainable business improvement and a seamless internal audit function.

In short, internal audit should never be considered an “island” in the operational matrix, and it needs to remain vigilant in building quality relationships with decision-makers to better understand risk management and maintain sustainable business operations.

Agility Is The Key To Internal Audit Awareness Month

Photo by Desola Lanre-Ologun, on Unsplash.

“Remote working, macroeconomic shifts, and structural changes have heightened existing risks and created new ones… Audit functions must refocus on areas they may not have considered high risk or on risks they may not have considered at all”.

This quote, from the McKinsey report Building the internal-audit function of the future, rightly highlights how agility is now central to internal auditor effectiveness in light of fast-changing business environments.

This means creating a culture of internal audit that prioritises operational rigour and the reframing of audit function in light of mostly digital organisational changes, such as:

Remote work and hybrid work oversight
IoT
Improving cloud functionality
Poor network latency
Network insecurity, and so on

This extra level of digital diligence requires audit teams to constantly iterate and review audit systems (both in-person and online) to make sure up-to-date processes are being followed, confidentiality is guaranteed and databases are shored up.

So here’s an Internal Audit Awareness Month hack – every internal audit department needs to make sure that internal control is “appropriate and effective” for the job at hand of protecting and improving overall business operation, and adapting business processes and controls where required.

Don’t Fight Digitally-Driven Internal Audits

Photo by Markus Spiske, on Unsplash.

“Changing execution from a traditional sample and controls focus, to higher precision audits that leverage technology such as neural networks and AI to test 100% of the populations…(and) develop a roadmap for people-led, data-driven transformation.”

When it comes to organisational change and being leaders, rather than followers, of digital change management, internal audit professionals need to work with technology and digital tools, rather than against them.

If anything, the explosion of new AI tools over the last few months, and the possibility of AGI in the very near future, should be a clarion call to internal audit – and internal audit professionals – that they are sitting on the cusp of an industry-defining shift in priorities and processes.

Never has a technological shift put so much focus on the “awareness” part of Internal Audit Awareness Month.

Don’t Fight Next-Gen Change

As this PwC report shows, audit precision and flexibility – in fact the whole internal audit profession – hinges on Next-Gen skills development:

“Internal audits need people who know how to use technology effectively and who have the knowledge to audit business operations that use new technologies”.

This Internal Audit Awareness Month, organisations should cater for digital change by making sure each Internal Auditor (and, to be frank, External Auditors too) is a pioneer, not a follower, of digital transformation strategies.