Why Technology is Crucial for Providing Effective Internal Audit Assurance

Today, internal audit is under constant pressure to provide assurance for the right risk at the right time, driven by heightened investor and other stakeholder expectations. Business leaders expect auditors to expand their risk coverage, an expectation that becomes more challenging as risks increase in volume, velocity, and variety. To top it all off, these growing demands on audit functions coincide with growing concern over a shrinking, and increasingly competitive, internal audit talent market. AuditBoard explored these multifaceted challenges in our OpsAudit product keynote at the 2023 Audit & Beyond User Conference. Continue reading for the biggest takeaways from this session.

Maintaining Assurance as Risk Velocity Accelerates 

Against the global backdrop of conflict in areas like Ukraine and the Middle East, the risk landscape continues to undergo significant changes in 2024, characterized by growth in areas like cybersecurity and ESG. Successfully keeping pace with this rapidly evolving environment is critical to developing and maintaining an internal audit plan that meets the highest risk priorities of your business. Alongside investing in internal audit talent through upskilling, hiring, and retaining initiatives, technology is the key to achieving effective assurance in the face of such unpredictability.

How Technology Can Empower Auditors to Rise to Today’s Challenges

The most predominant challenges internal auditors are facing in the coming year include: evolving regulatory and business needs, increasing audit coverage expectations, and expanding data diversity and volume. Below, we explore how AuditBoard’s new and upcoming product capabilities offer solutions to these challenges. 

Challenge: Evolving Regulatory and Business Needs

• Adapting to rapidly shifting risks and regulations
• Data integration for risk profiles is time-consuming 
• Lack of precise data impacts risks, allocation, and audits 

For companies with global operations, the work of staying compliant has become more challenging as regulations expand and evolve across all sectors. Thousands of new compliance regulations are issued every year in the United States alone. Prominently, the growing threat of cybersecurity risk was reflected in the SEC’s recently adopted rules enhancing and standardizing public companies’ cybersecurity incident reporting and risk management disclosures. Concurrently, there has been a clear shift from voluntary to required climate disclosures, with Western Europe leading the way. The passage of the United Kingdom’s Climate Regulations in 2022 and the European Union’s Corporate Sustainability Reporting Directive (CSRD) in 2023 have set the stage for the United States to follow suit shortly. In 2024, all eyes are on the SEC’s proposed climate disclosure rules, which are expected to be formalized this year — adding to the complexity of reporting requirements businesses must incorporate into their risk and audit plans. 

AuditBoard Solutions

Entity risks: This feature in OpsAudit allows teams to conduct a risk assessment at the intersection of an auditable entity and the entity risk, then use the resulting risk rating to determine the right coverage cycle.   

• Enables teams to build a more granular, bottoms-up risk plan.
• Automatically calculates the next time a risk within that auditable entity needs to be covered. 

Drafts: This feature in OpsAudit allows teams to easily create and queue up staged audits to be reviewed and scheduled to be performed at a later time. 

• Select which risks you want to cover in upcoming audits.
• See individual, specific risks you’re tracking in each auditable entity. 
• See how responsive your current audit plan is to risk results from the most recent risk assessments. 
• See which audits are coming due for risks that need to be covered based on that automated calculation.

Challenge: Increasing Coverage Expectations 

• Inadequate audit resources for expanding audit scope
• Inability to prove the efficacy of resource allocation in the context of audits
• Quality may suffer if the audit team is overburdened and overlooks risks 

As the percentage of college graduates entering public accounting decreases, and rapid digital transformation drives up the demand for new technical skill sets, upskilling, hiring, and retaining audit talent continues to be a priority for CFOs. According to a recent PwC Pulse Survey, 51% of CFOs plan to hire in specific areas to drive growth to meet growing audit expectations in 2024. Demand is especially high for auditors with skill sets like data analysis and forecasting, and experience using relevant technologies. 

AuditBoard Solutions

Audit Scoping: This feature streamlines project planning and walkthroughs by simplifying RCM scoping, automatically reflecting what is determined to be in scope as work steps in an audit project.

• Enables testers to quickly navigate from one audit test to another. 
• Easy, intuitive, and automated way for auditors to organize their test plans.
• Provides stakeholders visibility and transparency into what was included/not included in an audit and the rationale behind it. 

Resource Summary: This recently updated feature makes it easier to see and update auditors staffed on projects as well as hours booked, enabling efficient resource allocation. 

• Enables teams to easily adapt their audit and resource planning cohesively.

Challenge: Expanding Data Diversity and Volume

• Manual analysis is reactive and can lead to delayed/inaccurate insights
• Requires scalable data analysis, which is not possible without automation 
• Missed opportunities to deliver timely and strategic insights 

Organizations are relying on internal audit to provide more timely and relevant testing insights as data diversity and volume grow at unprecedented rates, placing a critical demand on audit functions. To remain effective, audit functions must evolve to provide timely and actionable insights on critical risk and assure stakeholders that risk and controls are being monitored, managed, and mitigated effectively. For audit teams without access to enabling technologies like advanced analytics, sifting through data evidence is a time-consuming process rife with inefficiency that hinders timely analysis.

AuditBoard Solutions

AB Annotate: This feature is a fully integrated tick-marking, referencing, and markup solution that enables users to work across the AB platform and their sample evidence and testing lead sheets. 

• Streamlines attribute testing and reduces errors when it comes to manual ticking and time.  

AuditBoard Analytics: This solution enables auditors to complete full population sample size testing automatically, empowering them to perform comprehensive, accurate testing quickly. 

• Enables auditors to achieve comprehensive testing in less time. 
• Empowers auditors to deliver accurate, timely, and strategic insights when it matters. 

Capitalizing on Technology to Keep Pace With Risk 

Informed audit planning requires adapting to changing risks, regulations, and business needs in an effective and timely manner. To tackle the multifaceted, modern predicaments organizations are facing, internal audit teams must partner with enabling technologies to optimize their audit and risk programs for efficiency and agility, in addition to investing in skilled audit talent. AuditBoard empowers teams to efficiently scope their audits to align with risk, elevating teams to the level of strategic partner. To learn more about AuditBoard’s new product capabilities and how they can empower and enable your audit team, request a custom-tailored product walkthrough here.