Evolution of Internal Audit and its Adaption to the rapidly changing Business Environment

 In today's world changing businesses is very rapidly increasing which is evolving the role of Internal Audit. Traditionally, Internal Audit has been viewed as a role that gives assurance to organisations regarding their control processes, risk management and governance. However, to cope with today’s advent of digital transformation, increasing regulatory complexity and stakeholder expectations, Internal Audit must adapt and change to be relevant and effective.

Source: Internal Audit

As per the article “Repositioning The Internal Audit Team As A Strategic Business Partner” briefs on the point that one of the most significant issues that Internal Audit has today is reconciling its traditional job of providing assurance with its expanding role as a strategic business partner. This issue can be resolved if Internal Auditor’s just outstrip the demonstrating the errors and compliancy. The article also states that enlightening and proactive information that can really let the organisation grow and achieve their goals and values.

This difficulty has been faced by many of the organization whereas creating a hybrid approach towards initializing such practices which involves providing assurance and that compounds with the expertise of advising experts. Thus, these are some of the techniques guided by “The Future of Internal Audit: Gardener of Governance” thus involves certain critical steps as follows:

1. Understanding business approach: To guarantee the significance and their job worth, the Internal Auditor should associate the auditing strategies and method with the organisation’s plan.

2. Technology Utilisation: The usage of technologies like AI, automation, and data analytics allows an Internal Auditor to increase the effectiveness, productivity and allowance of its audits. However, these technologies actually help with the detection of threats or dangers, analysing the trends and patterns, and also assuring more accurately and quickly.

3. Identify Opportunities for Growth: Here the position of the Internal Auditor plays a vital role which can identify the sections for the growth and connect it to the management and Board of the Directors which will eventually lead to the overall business growth and avoid risks, such perspective of the Auditor can motivate the management to adapt the innovative techniques for improvements.

4. Collaborate with other roles: Roles like risk management, compliance with the external auditor, other assurance like advising experts to generate a comprehensive view of the controls of the organisation and risk environment. This will automatically lead to reduction in the duration of auditing by reducing the duplication of the work, less stressing and more sorted as there will be less efforts taken eventually leading to effectiveness in the organisation’s management and the control system.

5. Trustworthiness and reliability: By demonstrating integrity, independence and more of professionalism in the work is the main key to maintain the sureness among the shareholders and stakeholders for the Internal Auditor. Internal Auditor being the strategic partner of the company, it is the crucial part for accepting the suggestions.

Through a hybrid approach with the readings from the articles “ Using a Hybrid Mindset to Disrupt Internal Audit” and “The Evolving role of Internal Auditor in NBFC of Risk Management”, the internal auditor can move from a reactive and passive role to a proactive and dynamic role and from a cost centre to a value creator. This enables the internal auditor to fulfil both his traditional audit role and his emerging role as a strategic business partner, thereby contributing to the success and sustainability of the organization. This evolution of the internal auditor is not only necessary, but also provides the internal auditor with the opportunity to rediscover their value proposition and increase their influence on the organization.