Internal audit teams often play a massive role in ensuring that a firm’s governance, compliance and risk management processes are operating at optimal level.
However, internal auditors can do more than just check boxes – they are in a position to help guide the overall strategy of the company.
In a recent post by Dilligent, the company explored seven key indicators of internal audit maturity and how these traits allow audit teams to serve as strategic advisers.
A first key sign is that the program is aligned and flexible. “A mature internal audit program is closely aligned with the organization’s overall strategic plan but remains flexible to change,” said the company.
Diligent noted that by aligning internal audits with the broader business strategy and updating procedures based on strategic goals, the audit process can contribute to overall business improvement, enhancing organisational performance.
Secondly, the program is also able to successfully integrate data analytics. Data analytics often play a central role in helping internal audit teams become proactive partners and advisers to the board.
Diligent remarked, “Not only do they improve data quality and save auditors time by allowing them to analyse large amounts of data, data analytics can also deliver valuable and practical insights, enabling clearer communication.
A strong internal audit program also uses holistic risk assessment. “Internal audit teams should strive to analyse risks at both a micro and macro level in order to gain a comprehensive view, not just a focused assessment of one risk at a time.
“Many risks are interconnected, which is why it’s important to understand how they might relate to each other and what the implications might be for the business. Strategic objectives — and risks to those objectives — should be monitored and prioritized on a continuous basis to ensure full protection,” Diligent explained.
It is also likely such an audit presents a variety of skills and backgrounds. These skills can include critical thinking, leadership skills and knowledge relevant to their specific industry.
Another example of a mature audit is that it offers deep visibility to the board. Thorough documentation, Alessa claims, lends itself to deep visibility, which is key to staying on top of potential risks and keeping the board informed.
Diligent explained, “User-friendly dashboards drive clear reporting, which audit teams can use to build more effective and agile internal audits, and which boards can use to obtain real-time updates and important insights.”
Automation and continuous monitoring is also a key part of a mature internal audit. “Automated workflows not only speed up internal audit processes — they also minimize the potential for human error,” said Diligent.
Continuous monitoring also empowers internal audit teams to investigate what is going wrong as its happening and immediately remedy the problem, rather than lose time on it – which drives continuous improvement.
Finally, it offers key input for strategic decision making. Diligent concluded, “Perhaps the ultimate indicator of a mature internal audit program is the ability to serve as a strategic partner and advisor to the board.
“When visibility and communication are clearer, internal auditors are able to “speak the same language” as, and therefore better interact with, other parts of the business.
“By utilizing data analytics, automated workflows, continuous monitoring and a diverse set of skills, internal audit teams can spend less time on mundane reporting tasks and more time generating insights that guide strategic decision-making across the organization.”
Read the full post here.
