2018 State of the Internal Audit Profession Study

The foundational tools and talents of technology-enabled Internal Audit

Moving at the speed of innovation

Is your internal audit function innovative? Does your organisation have the talent and tools to deal with the risks arising from emerging technologies? And how will you attract the next generation of talent?

Technology advancement is fueling innovation in every industry. Organisations are immersing themselves in innovation to develop new products and services and enter new markets. Emerging technologies bring new risks and it's incumbent on risk professionals to help their organisations ensure that processes and controls are effective without slowing innovation down. For internal audit to continue to deliver value and meet stakeholder expectations, it's essential that they both understand the impact of emerging technologies and in turn adapt new technology, skill sets and approaches. PwC's Global 2018 State of the Internal Audit Profession Study sought to understand how internal audit functions are building a technology and talent enabled foundation to support their organisations’ innovation strategies. Key findings include:

  • Three-quarters of internal audit functions using advanced technologies are contributing significant value, which is a far higher percentage than among those with less technology focus
  • The group using advanced technologies is known as “Evolvers”. Evolvers are seen to be more innovative in technology, more collaborative with other lines of defense, and better aligned with stakeholder expectations when it comes to their scope and audit plans. Evolvers report that their organisations’ risk management programs respond to innovation very effectively at a rate that is double the percentage of their peers.
  • 66% of respondents see that failing to improve Internal Audit’s technology adoption is their greatest risk
  • 14% of internal audit functions are advanced in their technology adoption. This group includes organisations not only in large or regulated industries, but spans industries, company sizes, and geographies, which suggests that the stereotypical technology barriers of budget and size can be overcome.

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As our study shows, Internal Audit functions adopting advanced technologies are winning the race. Jason Agnoletto, National IA leader, shares some insights into the findings

Evolver characteristics

Evolver characteristics which make these top-performing Internal Audit functions stand out which include:

  1. They move technology and talent in lockstep. Evolvers are advanced in their technology use and far outperform their peers on talent: 72 percent of Evolvers excel at obtaining, training and sourcing the talent they need compared to 46 percent of Followers and 29 percent of Observers.
  2. They build a deliberate strategy. 85 percent of Evolvers focus on technology enablement as part of their strategic plan, compared to 61 percent of Followers and 38 percent of Observers.
  3. They leverage technology-enabled collaboration tools. Internal Audit functions that are advanced in their use of collaboration tools stand out from their peers in managing stakeholder relationships and cost efficiencies.
  4. They are self-service in data extraction.  More than 80 percent of Evolvers are self-sufficient in their data extraction.
  5. They utilise tools and skill sets for enhanced productivity. From advancing data analytics and monitoring, to leaning into intelligent automation, Evolvers are more often investing in technology risks and tools training than their peers.
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Jason Agnoletto, National IA Leader, provides some tips to Audit and Risk Committee members on how to ensure their IA functions are staying ahead of the game.

Contact us

Jason Agnoletto
Partner, National Leader, Internal Audit Services, PwC Australia
Tel: +61 3 8603 2180
Email

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