One of the most significant challenges is dealing with the unknown, elusive risks you could not see coming. The clear starting point in transforming to prepare for heightened risk is developing a culture of innovation among the staff. Embracing a culture of innovation changes the team’s dynamic, especially when treated as an iterative process. It’s critical to make small changes, see how they work, and then make more small changes while allowing for failure. By allowing teams to experiment without fear of failure, employees often exceed expectations in the tasks they attempt to innovate.
Embracing the Capability of Technology
One area consistently included in transformation is the use of technology. Embracing emerging technology helps teams improve their work and streamline communications. For example, some organizations are now experimenting with generative artificial intelligence (GenAI) tools like ChatGPT. They use ChatGPT to help create policies and procedures, research topics for risks we may not have considered, and improve quality when they have to write anything.
Teams are leveraging technology in increasingly creative ways to enhance their ability to perform data analytics, create process automation, and produce visualizations. By focusing on those areas, they can work more efficiently and effectively. This often produces proactive, forward-looking insights as to what control gaps we should focus on based on what we learned in the past.
Focusing on People and Change Management
To succeed, change management is critical for stakeholders and staff. For staff, it’s important to provide opportunities for upskilling and learning in areas the department needs to advance. In some cases, you may need to start with back-to-basics training to establish a baseline, and then start upskilling. When advanced skills are needed quickly, it may be beneficial to hire another individual or consider partnering with outside help.
Before you can start upskilling, you need to understand the current skills and gaps in the department. Start by consulting with your Human Resources (HR) team to perform a skills assessment for your department’s needs. Having a strong HR partner can provide change management training and an assessment of the team’s strengths and weaknesses.
Improving Communication Methods
For stakeholders, the focus typically shifts to improving communication methods. The audit transformation is a great time to introduce modern reporting and dashboards to management and the audit committee.
Transforming communication with the audit committee usually means moving to dashboards and visual reporting. Imagine yourself as the CEO getting this report. Consider what message you want delivered and highlight that in the final report with an appendix if you’re going to dig deeper. Ultimately, they need to understand the key points through dashboard visualizations and charts that measure the typical items from an audit committee package, such as audit plan updates and outstanding findings, but focus on the high points.
Setting Realistic, Measurable Goals
The final step is to set realistic goals for the team to work toward during the audit transformation and measure their progress. Look at all the changes you want to make and prioritize, even into a multi-year plan if needed. Many people have experienced change fatigue in the past few years, so it’s important to remember to be realistic about the amount of additional work the team can handle. As much as possible, look for ways to leverage technology to take work off of the team.
An Audit, Risk, and Compliance Transformation
Preparing for heightened risk exposure in the future takes many forms and will be different for each organization. The roadmap provided above can help with transforming any department to withstand the impact of future risks by embracing innovation, using technology, upskilling the team, and setting realistic goals. The effort needed for an audit, risk, and compliance transformation is worth the effort now and will pay off even more in the future.
