Automating internal audit – from overwhelmed to excited
Blog: Julia Seppä
The risk landscape is changing fast and news headlines remind us every day that the future was… well… yesterday. New risks and response strategies are around every corner. Leaders realise that business associated risks need to be managed extremely well in today’s world especially when pursuing new initiatives.
28.5.2018 – Organisations that fail to identify and address non-compliance face potentially significant financial, client service, and reputational damage.
As it happens too often, internal audit, IT and other governance functions typically struggle with limited resources. In the world of constant pressure to reduce costs these functions are often left with even fewer people to perform a wider array of tasks, further increasing the risk of failures in manual testing of controls.
After numerous opportunities
The answer lies in internal audit groups moving to ongoing assurance on core processes, controls and activities to management and the board.
Here are just some benefits of automating core assurance and implementing a digital testing of controls.
- Increase efficiency. Manual testing processes are often inefficient, subject to manual error, and extremely time-consuming. Automation often reduces the risk of manual error and improves the quality and speed of testing. It also creates efficiencies by reducing the time individuals spend gathering data, selecting what to test, and obtaining the detailed documentation.
- Discover insights. Digital testing of controls can reveal trends, identify anomalies and provide valuable insights to management. This can elevate the internal testing effort from a cost center to a function that provides true value.
- Reduce risks. Digital testing extracts, compiles, and tests defined aspects of data from multiple systems across an organisation. It also enables 100% testing of the controls and identification of anomalies. Having a full view of non-compliance items provides transparency and helps the company reduce its risk profile.
- Provide continuous monitoring. When a specific automated control test is established, the test itself can become a monitoring control on which the company can ultimately rely.
Overall, automating internal audit provides ample opportunities for easily-achieved cost savings and enhanced assurance simultaneously.
This enables internal audit to allocate resources to higher value areas and activities and get excited instead of being simply overwhelmed.