3 min. de citit 18 aug. 2021
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Why internal audit can become a change agent

3 min. de citit 18 aug. 2021
Teme conexe Consultanță

Internal audit (IA) can now blend technical methods with human insight to help the business take better decisions.

In brief
  • Across their operations, nearly all companies are still at an early stage in their digital transformation. In particular, IA needs to evolve to stay relevant.
  • Technologies such as AI and predictive analytics are offering IA the opportunity to broaden both what it does and the insight it can provide to the business.
  • While this transformation can be enabled by technology, it is people who will drive the change. There must be equal balance between tools and mindset change.

Digitalization is driving business models to evolve while creating many completely new ones. The entire business landscape is transforming. What does this mean for IA functions?

The role of IA is to provide the board with a second opinion on everything the business is doing. To do that, IA teams have to be capable of understanding everything about the business – only then can they help the board make decisions. But currently, IA functions are struggling to feel fit for purpose. Some say they haven’t been truly relevant and current for some time. It is time for IA to adapt and evolve.

What needs to change?

In the EY Tech Horizon survey, which we conducted shortly before the COVID-19 crisis, the results reinforced that almost every company was on a journey to digitally transform its business. Only 4% said transformation was fully embedded and optimized across their operations. And that is particularly true of IA functions.

For IA, the business’s activities are like a jigsaw puzzle. IA exists to provide a frame around the puzzle, and identify and comment on the gaps where there are pieces missing. But because of digitalization, the pieces now run into the hundreds of millions. For example, IA could ask whether the company’s purchasing processes comply with its own regulations. To answer the question, IA looks at a sample of thousands out of millions of transactions. Is the sample representative? Maybe, maybe not. So, to be sure, IA must find a way to identify all of the transactions.

Can a human IA function provide detailed insight over all of these millions of pieces? It’s impossible. Digitalized activities need digital tools.

For IA, the business’s activities are like a jigsaw puzzle. But because of digitalization, the pieces now run into the hundreds of millions.
Martin Wiedemann
EY Global Virtual Internal Audit (EY VIA) Activation Lead, Cofounder of EY VIA

How IA can change

IA functions must redefine the work that is done by machines and humans, while playing to the strengths of people’s qualitative capabilities and decision-taking. Companies have been trying to find data analytics solutions for years to understand the past, fix the present and influence or predict the future. Now, with a combination of human skills and technologies including predictive analytics, AI and machine learning, it’s possible.

And as IA finds new technical ways to do its work, it will broaden its capabilities.

Technology will enable real-time risk monitoring and timely reporting of high-risk findings to instil trust. It can reframe risk as an opportunity and identify those that could help the company grow. It can help the company define the direction of its strategy and recommend the processes to achieve it. It can, as one C-level executive complained, hold better information about the business than the board itself.

The future of IA is as much about tools as it is a mindset change.
Milene Carvalho
EY Americas Enterprise Risk Practice Leader

Fully digitalize IA service delivery

EY has developed the Virtual Internal Auditor platform to digitalize IA services from strategy to risk assessment and reporting.

Becoming a change agent

IA is the only function eligible – or expected – to have access to every activity of the organization. And to do that, it must be able to bring a multiplicity of systems into one fabric. The extraction capabilities to do this have only very recently been created. Even more so a tool that can deal with process flow and analytics.

So while the transformation of IA is enabled by technology, it’s also driven by people, as digital native skillsets become a larger part of the workforce. This means that the future of IA is as much about tools as it is a mindset change.

IA has not had all the data, analytics power or time to act on every insight before. Now it can. And it can inform very different decisions.

We envision that in the IA function of the future, our key KPI must be our ability to resolve the company’s problems before it even knows there are problems. 


Following years spent trying to find data analytics solutions that would help support IA functions, it is finally possible. Predictive analytics, AI and machine learning combined with human skills will enable real-time risk monitoring. The result is an IA function positioned to deliver much broader insight and advice to the business.

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