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Perspectives

Is a linear approach to internal audit out of line? 

Bring flexibility to IA with Agile

The Institute of Internal Audit (IIA) recommends workflows to be iterative, not linear. The IIA’s latest updates to the Global Internal Audit Standards foster greater flexibility in engagement work programs, emphasizing that steps may need to be done out of order or concurrently to optimize outcomes. Learn how the Agile approach can assist internal audit teams in adapting to this new guidance.

Disrupting internal audit’s status quo

Linear and sequential approaches have been the tradition for internal audit professionals for decades. These methods were sufficient in overseeing operational and management processes when the IIA was founded. However, that was over 80 years ago, and the business world has evolved significantly since then. While engagement work programs are still useful in outlining action plans, following them too strictly may create challenges. New systems, emerging business lines, and changing regulatory requirements will necessitate an internal audit team who can leverage engagement work plans and pivot as developments arise. 

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Moving from inflexible to iterative with Agile

As internal audit teams pivot to follow the new guidance from the IIA, Agile proves to be a great framework to help professionals reconsider their workflows. Instead of seeing the race as merely a start and finish line, Agile incorporates checkpoints throughout the race to help enable a more iterative mindset. This also creates room for leaders to inform their colleagues of any updates that may cause the final deliverable to change, such as regulatory updates or new business priorities. As the IIA creates more space for iterative engagement workplans, adopting Agile can help you bring more flexibility to your way of work.

Putting Agile in action

With the Global Internal Audit Standards encouraging more flexibility in engagement programs, leaders can turn to tried-and-true processes of Agile to accelerate progress. Explore how internal audit professionals are incorporating an Agile mindset to enable positive business outcomes.

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Improved stakeholder satisfaction

Instead of getting results all at once at the end of the audit, stakeholders are getting actionable information as they go. Consequently, they’re often able to address findings before a report is even issued. They’ve reported that internal audit’s role evolves to be more like a business partner and less like the “process police.”

One client shared that his Agile-driven internal audit team was trying to help him run his business better, not just “ticking boxes.”

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Prioritizing risks

Are there risks hidden beneath the surface? Agile’s iterative approach creates purposeful feedback loops to help keep internal audit aware of sudden changes and pivot accordingly.

An automotive company doing its first audit of a regulated business process chose one particular risk area to include in its first sprint because it suspected the risk area held hidden, but important, complexities. The company was right and pivoted its plan to address those risks in the following sprint.

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More work in less time

Teams are often able to get work done sooner by starting with the most important risks, limiting the number of tasks in progress, and continuously reevaluating the plan. Frequent feedback with the client improves focus and allows the team to spend less time on smaller risks. Cycle times, especially between the end of fieldwork and issuance of the report, often drop.

One chief audit executive reported that when the time frame dropped from months to days, the focus shifted from getting old reports out the door to the actual issues emerging from ongoing audits.

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Next in the series: The culture of coaching.

In case you missed the earlier reports from this series, take a moment to explore our collection of insights.

Infusing Agile in Internal Audit
Why mindset takes priority over process?

Embracing an Agile audit methodology for enhanced efficiency
Unlocking transformation through the Scrum Framework

Empowering internal audit with Agile leadership
What leaders should consider as they embark on the transformation journey?

Empowering IA teams with evolutionary leadership
Embarking on an inner journey before creating external change

Author

Lipi Sinha
Advisory Specialist Master
Agile Internal Audit
Deloitte & Touche LLP
lsinha@deloitte.com

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