AuditBoard’s 5 Takeaways From the 2018 State of the Industry Report

AuditBoard’s 5 Takeaways From the 2018 State of the Industry Report

PwC has released its annual State of the Internal Audit Profession report: “Moving at the Speed of Innovation: The foundational tools and talents of technology-enabled Internal Audit.”

That “technology-enabled” was used to describe Internal Audit indicates the industry’s changing attitudes toward technology adoption – to the degree that industry leaders are willingly shifting their entire Internal Audit approach to embrace it.  

Below, we highlight AuditBoard’s biggest takeaways from the 2018 Study.

Internal Audit Needs to Understand Disruptive Technology

These include the essential 8 emerging technologies PwC suggests Internal Audit must work to understand, including Blockchain and Artificial Intelligence. Over half of the internal auditors surveyed believed lack of technology adoption will lead to diminishing value for their organization.  

Evolvers Are Driving More Value

The 2,500-plus board members, senior executives and audit leaders surveyed were broken down into the following: 14% were Evolvers, groups that are advanced in their technology adoption; 46% were Followers, groups that are taking notice and following the Evolvers’ technology adoption; and 37% were Observers, groups that have basic or even no technology use. Across the board, Evolvers were seen as delivering greater value to their organizations, in categories such as:  

  • Effective use of analytics in audit testing procedures (32% more compared to Followers)

  • Cost optimization (16% more compared to Followers)

  • Talent enablement (26% more compared to Followers)

Source: PwC, 2018 State of the Internal Audit Profession Study, March 2018.

Build Technology and Talent into a Single Strategy

The Evolver difference is moving talent and technology in lockstep. This is because Evolvers’ strategies focus on how talent has to change in concert with technology. 

72% of Evolvers excel at obtaining, training, and sourcing the right talent, compared to 46% of Followers and 29% of Observers.

85% of Evolvers focus on tech enablement as part of their strategic plans, compared to 61% of Followers and 38% of Observers.

Source: PwC, 2018 State of the Internal Audit Profession Study, March 2018.

Where Technology Has Become Foundational

Use of GRC tools and the ability to extract data directly from operational and financial systems have become integral to Internal Audit self-sufficiency. The tools that are now considered foundational for internal audit functions include: Self-service data extraction, Workflow/dashboarding/reporting, GRC tools, and Advanced analytics.

Where Technology is Most Needed

Collaboration, Data Extraction, Analytics, and Automation tools will have the most tangible impact on Internal Audit’s processes and methodologies

As shown below, Evolvers excel in their tech maturity across these categories compared to Followers and Observers. However, Evolvers still fall short in use of Predictive and Automation tools.

Read and download the entire report here.