The internal audit profession has undergone significant changes in recent years due to technological innovation, regulatory requirements, and the ever-evolving business landscape. As organizations strive to become more agile, internal auditors must adapt and transform to remain relevant and add value to their organizations. The new standard issued by the Institute of Internal Auditors (IIA) provides a roadmap for internal auditors to meet the demands of the future of work.
The standard identifies Domain IV, which outlines the responsibilities of the Chief Audit Executive (CAE) in managing the internal audit function. This domain sets the foundation for long-range strategic planning for internal audit, something that was previously alluded to but not explicitly stated in previous standards. Principle 9, Strategically Plans, covers key areas such as understanding governance, risk management, and control processes, internal audit strategy, the internal audit charter, methodologies, the internal audit plan, and coordination and reliance. This principle provides a logical flow to managing resources, setting up methodologies, and communicating effectively with all stakeholders.
The standard also emphasis effective communication as a critical aspect of the internal audit function, and Domain IV provides specific guidelines on what types of communications are necessary and how frequently they should occur. Additionally, Domain IV provides a powerful means to clarify the internal auditor’s role and value to stakeholders, including senior management teams.
The restructuring of the standards to bring together like topics that were once dispersed across the six IPPF components demonstrates the IIA’s commitment to providing a comprehensive framework that internal auditors can follow. This new standard not only guides CAEs but also provides internal auditors with a clear direction on how to manage their resources, build relationships, and ensure the performance of the function.
Within its recommendations, the new standards put internal auditors’ future of work at the forefront and ask them specifically to embrace new technologies and take a strategic approach. The IIA’s new standard provides internal auditors with the guidance they need to navigate these changes and transform the internal audit function from a mere box-checking to problem solvers achieving organizational objectives. Internal auditors who embrace this new standard and the future of work will be well-positioned to add value to their organizations and remain relevant in an ever-changing business landscape.
This is where Risk Mining can play a critical role. Risk Mining is the process of analyzing data from various sources to uncover underlying issues and address them proactively, rather than simply ticking boxes. With Risk Mining, internal auditors can proactively identify and address risks in real-time, reducing the likelihood of negative outcomes and preventing losses with continuous monitoring and daily insights and alerts.
By incorporating Risk Mining into their processes, internal auditors can also focus on strategy and identify opportunities for improvement, such as optimizing processes. This approach can lead to more effective risk management, increased efficiency, and ultimately, a positive impact on the business bottom line.
By leveraging data and being more strategic in their approach, internal auditors can continue to add value to their organizations and ensure the performance of the internal audit function. It is important though that the Risk Mining solution have capabilities of first understanding how the business process works in real life and not based on assumptions, and only then uncovering the underlying risks. This concept of As-Is state in real time can provide the best false positives elimination outcome, the most accurate risk identification and the ability to explain every risk found with the full business context.
In conclusion, the future of work for internal auditors will require adapting to new technologies, collaborating with other functions, and being more strategic in their approach.
The IIA’s new standard provides a roadmap for achieving these goals, and Risk Mining can help internal auditors meet the challenges of the future by leveraging data to proactively identify and address risks. By embracing these changes, internal auditors can remain relevant and add value to their organizations in an ever-evolving business landscape.