There is currently a misalignment in the world of Internal Audit. As Richard Chambers and AuditBoard’s 2023 Focus on the Future Report reveals, there are key areas where significant gaps exist between risk levels and planned efforts. The ability to attract and retain top talent, macroeconomic factors and geopolitical uncertainty, and business model disruptions due to the evolving risk landscape were all listed as top concerns for major organizations, yet only 13-20% of businesses have meaningful plans to devote substantial resources to these issues. Internal audit teams need to be ready to identify and address this kind of disconnect to ensure that their organizations are positioned for success in 2023. In this article we will identify three top internal audit trends, the challenges they present, and how internal audit teams can leverage software solutions to deploy team resources strategically against the most pressing concerns — setting themselves, and their business, up for success.
Trend 1: Velocity of Risk and Technology Change
Teams must continually provide assurance while adapting to evolving risks, digital disruption, and regulatory changes. Today we’re seeing significant contributions from the digital revolution, climate change, and stakeholder expectations, as the speed of decisions, the amount of connectivity, and the availability of data have all increased. Companies are learning that they have to balance pressures regarding what’s coming from governments, investors, and society as a whole. Stakeholders expect companies to act legally and with a conscience, and regulators are focusing on things like climate change, data privacy, and security.
Challenges in this area hit in numerous ways. First, there is an expanded purview required from emerging technologies and related risks. Second, there are repeated shifts to audit scope that put new burdens on teams. Third, there is an increased depth and breadth of data that brings along associated issues — including data reliability, related required team efforts, and resource constraints.
Technology can help audit teams develop solutions for these issues. Audit planning software accelerates risk and change responses from teams. With this preparation, teams can create risk-based audit plans with risk metadata to allow for efficient execution and continuous assurance.
Trend 2: Growing Internal Audit Talent Gap
Staff shortages, changing attitudes towards work, and a pre-existing skills gap are increasing talent risk and influencing how internal audit teams approach their work. Many teams are reporting that they are losing talent and struggling to replace them. Meanwhile, for the remaining team members, expectations are growing. They want to do more, and we need to keep them engaged. We have to support the folks that we have and give them opportunities to work in cybersecurity, sustainability, and other areas of interest.
The challenges created by the talent gap are as expected. Due to greater cost-cutting and efficiency demands often put in place by organizational leadership, teams are being asked to do more with less as headcount may be frozen or cut. There are the aforementioned difficulties retaining people and improving their skills, plus there are increasing specialization and training needs for team members.
A technology solution in this area is software with resource planning capabilities. This can help teams manage, optimize and retain talent by deploying resources more strategically, and it allows teams to improve individual and overall skills, efficiency, and experiences.
Trend 3: Align With the Business Objectives
The highly competitive corporate landscape and economic disruptions are driving the internal audit profession to refocus efforts on improved strategic alignment. Richard Chambers speaks often about auditors needing to become agents of change. When contemplating initiatives like cybersecurity, diversity, equity, inclusion, and third-party risk management, executive teams and audit committees all want better strategic alignment from internal audit teams. Internal audit must understand and embrace stakeholder needs and challenges so that we can better support their strategic initiatives.
The challenge for internal audit teams in this area is aligning audit with business priorities, which isn’t always as simple as that might seem. Plus, there is an increased requirement to validate internal audit resources. We have to start thinking in new ways, provide more value propositions, and be able to deliver more in less time.
Software solutions in this area position internal audit teams to align with strategic objectives and business needs. Capabilities include developing KRIs (Key Risk Indicators) and an executive dashboard for high-level, real-time data. Monitoring KRIs works to assess auditable entity risk, improves executive reporting, and creates data-driven risk assessments. The executive dashboard allows an organization’s audit committee and management team to stay current, with a single source of truth for the entire audit plan.
Internal Audit Solutions for Your Organization
AuditBoard is a purpose-built platform designed to help auditors with all of these challenges by providing an end-to-end solution for all internal audit activities. The ultimate goal is to make the internal audit team’s life easier, and it allows teams to conduct all activities within one platform. Be it audit planning, staffing, and scoping, or conducting testing, identifying issues, and reporting, AuditBoard’s internal audit solution gives teams a better understanding of where their work stands and improves collaboration with all stakeholders. Learn more about our software solution today.