A critical mass of factors has led internal audit functions to a watershed moment: They must disrupt or be disrupted. At Protiviti, we refer to the innovation and transformation internal audit functions must pursue as next-generation internal audit. These efforts — already underway in a growing number of companies — vary. But they share an agile, holistic approach centering on new directions for governance, methodology and technology that deliver efficiency improvements, stronger assurance and more valuable business insights.
For compelling reasons, chief audit executives (CAEs) are urging their teams to embrace an entrepreneurial spirit. Boards of directors and audit committees are raising their expectations regarding internal audit’s role. Directors no longer view internal audit as a place where a simple command of controls is sufficient. They and management want internal audit to address corporate culture, sustainability strategies, and other, still-unfolding and less tangible sources of organizational value.
Internal audit’s expanding role also demands keeping pace with business partners that are implementing transformation at breakneck speed. They are overhauling traditional business models and processes to enhance the customer experience, digitizing more offerings, and fortifying data-driven decision-making to boost operational performance. The magnitude of these changes explains why half of the top 10 risks board members and executives currently identify relate to digital transformation. These leaders are concerned about their workforce’s ability to transform quickly and in a risk-savvy manner, and whether their organization can compete effectively with nimble, born-digital firms.
So how are internal audit department meeting this transformational challenge? Each year, Protiviti asks leading internal audit departments around the world for a behind-the-scenes tour, and publishes these insights in a volume, Internal Auditing Around the World. This year’s profiles span the range from global banks and telecoms to national manufacturers and retailers. What unifies these internal audit organizations is their fearless embracing of technology such as robotic process automation, data analytics and machine learning, and drive to innovate to meet the dynamic demands of the business and deliver greater value to their respective companies.