Red Flagged: Internal Audit Scores Poorly in Digital Transformation Efforts
Internal audit leaders should develop new skills to stay relevant
Chief audit executives (CAEs) and internal audit leaders report their next-generation competency levels in three vital areas – governance, methodology and enabling technology – to be remarkably low, a Protiviti survey reveals.

The survey also identified that the majority of internal audit functions are at risk of losing relevance for not modernizing and transforming the audit process, against the increasing demands of today’s stakeholders

Nearly 780 Chief Audit Executives (CAEs) and internal audit leaders were surveyed across industries to uncover the pressing priorities for internal audit functions when it comes to next-generation auditing skills.

Audit leaders should step up their innovation and transformation initiatives

In what should be a red flag for chief audit executives and audit committees, enabling technology received some of the lowest competency-level self-assessments in the entire survey: (rated on a 1 to 5 scale with 5 being highest)

“We continue to advocate for the embrace of a next-generation internal audit mindset and the adoption of the governance, methodology and enabling technology competencies that will position internal audit functions to best support their organizations as they strive to transform amid this pandemic and in the years to come,” said Brian Christensen, executive VP, global internal audit, Protiviti.

• Robotic process automation (RPA) – 2.1
• Artificial intelligence (AI) and machine learning – 2.0
• Process mining – 2.2
• Advanced analytics – 2.6

One telling example of the need for internal audit leaders to step up their innovation and transformation initiatives is that only 10 percent of those surveyed are undertaking process mining – a form of analytics that uses transactional data captured by enterprise systems to analyze and visualize how processes are actually being performed – in their internal audit function, and a surprising 41 percent of respondents reported they have no plans to adopt this enabling technology at all.

Notably, internal audit’s exploration and adoption of enabling technology also lags that of other key business functions such as finance.

“Our survey confirms the awareness among internal audit professionals of how far behind their function is in terms of the core competencies required to provide value in the digital age,” added Christensen. helpnetsecurity.com