Embracing Technological Change and Expanding Advisory Services are Critical to Internal Audit Profession

Results from the latest Vision report from the Institutie of Internal Audits and the Internal Audit Foundation, based on feedback from more than 7,000 practitioners and stakeholders around the world, lay bare the extent to which technological change will continue to impact the internal audit profession.

The results of the “Internal Audit: Vision 2035 – Creating Our Future Together” report underscore the need for internal audit practitioners to expand the scope of their services and embrace emerging technology in order to continue to provide value to organizations in the years to come. in order to continue to provide value to organizations in the years to come.

Embracing Technological Change

The report identified several positive technology-driven changes that are expected transform internal audit over the next decade. Notably, 97% of participants said they expect technology to increase the complexity and volume of data available for auditors to analyze, and another 93% believe that new technology will allow audit functions to develop better insights for recommendations to stakeholders. Regarding AI in particular, participants agree that AI will aid in the analysis of more in-depth insights, however less than half (48%) reported that they are currently involved in AI-related activities.

“The takeaway from the research is clear: Internal audit must rapidly transform or risk becoming irrelevant to stakeholders,” said Anthony Pugliese, CIA, CPA, CGMA, CITP, President and CEO of The Institute of Internal Auditors. “The profession must shift its attention from the potential risks that technology poses to internal audit to embracing how it can optimize operations and expand internal audit capabilities. Leveraging new technology to provide more strategic, actionable insights will enable practitioners to proactively help their organizations stay ahead of emerging trends and risks.”

Expanding Advisory Services

Findings from the Vision report also revealed an increasing need for internal audit functions to expand the scope of their services and take on a more strategic advisory role within organizations. When asked to consider the value that internal audit can offer through both assurance and advisory services, 79% of participants agreed that advisory work will become more essential to audit functions in the years to come while playing a bigger role in internal audit plans. According to respondents, the top areas where internal audit functions can provide the most assurance and advisory services include operations and processes (87%), compliance (82%), and risk management (77%).

“Our stakeholders already expect more from the internal audit function, including being versatile and agile to provide a broader array of support inside the organization beyond traditional assurance,” said Warren Stippich, Jr., CIA, CRMA, CPA, President of the Internal Audit Foundation and National Managing Principal – Advisory Services Quality and Risk at Grant Thornton Advisors LLC. “The profession needs internal audit functions to accept the challenge of being able to accomplish the basic objectives of its annual internal audit plans while also having the ability to pivot to provide support through an advisory lens.”

Additional Findings

• Preserving independence and objectivity of the internal audit function
  • Just over half of respondents (53%) said their organizations understand the importance of independence.
  • Another 45% of respondents’ organizations moderately or do not understand its importance.

• Shifting public and stakeholder perception of the internal audit profession
  • Half of respondents reported that being misunderstood or undervalued represents the greatest challenge for the profession.
  • At the same time, 45% of respondents indicated a need for more support from leadership and stakeholders.

• Growing our pipeline to sustain our profession
  • When respondents were asked about top barriers keeping them from the internal audit profession, 33% of students cited inadequate networking opportunities with internal audit professionals, followed by lack of mentorship or role models within the profession, and misconceptions about career profession and opportunities within internal audit, both 28%.
  • From the educators’ point of view, 54% reported lack of awareness of understanding of the internal audit profession as a top barrier keeping students from the profession.

“The findings suggest that there is an opportunity and a strong need for the profession to increase awareness of the value of internal audit, while providing more opportunities for students and young professionals to explore it as a career path. Prioritizing the talent pipeline is crucial as we move toward achieving the profession’s envisioned future,” said Pugliese.