Internal Audit Alert – October 2022
INTERNAL AUDIT
Internal Audit is an independent appraisal activity within an organization for the review of, and to improve, the accounting, financial and other operations as basis for protective and constructive service to the management.
IMPORTANCE
Internal Audit has great importance in itself as an influential function within a company which helps in improving the functions and operations of the company.
Its importance was increased during the year 2020, when the global COVID-19 pandemic affected poorly the World Economy.
And it is the only one function i.e. internal audit, which helps the companies’ globally by providing a critical assurance, help in advising the management on the new scenario of risks and controls and also helps in anticipating emerging risks.
GLOBAL TRENDS
With the pandemic uncertainties and requirements, the concept of internal audit is moving towards a great position where organizations are guided through a landscape of risks.
Considering the requirements, various trends are being followed like expanding the scope of internal audit, quality assessments, transparency in organizational structure, etc.
There are several trends followed on internal audit globally, some of them are:
- ARTIFICIAL INTELLIGENCE
As we all know, Artificial Intelligence is the one through which all the work is/can be automated. Therefore, if we follow AI in the corporate culture, it will be a gift to the companies and the auditors.
So, if internal audit function also equipped with AI, it will help in the process of automating assurance.
2. CONTINUOUS RISK ASSESSSMENT
Continuous Risk Assessment includes monitoring the activities or functions at regular intervals. It can help Internal Auditor to direct its resources to where they are needed.
By continuous monitoring, one can identify the resources, where they are used and where to be used.
3. TRANSPARENCY IN ORGANIZATIONAL STRUCTURE
Transparency in organizational structure develops a healthy environment. It will be helpful for the auditors to engage with the companies’ operations as there will be free flow of information and remove the communication gaps.
Transparency also results in efficient and effective engagement.
4. UPGRADING AUDIT INFRASRTRUCTURE/PROCESS
By upgrading the Audit processes, one can work in an effective and efficient manner. Upgrading of Audit Process includes use of audit techniques in a proper way.
5. APPLICATION OF ROBOTIC PROCESS AUTOMATION
Various companies have embraced the Internal Audit trend of advancing towards Robotic Process Automation to drive efficiency, expand capacity, boost quality, and extend audit coverage.
