Internal audit is therefore in the process of a radical shift as organizations respond to new threats, new technologies, and new requirements. This is why, at Charles Financial Strategies LLC, Dr. Sabine Charles and her team provide efficient strategies for managing such changes. Their commitment to always keeping their finger on the pulse and recognizing emerging trends such as agile auditing and ESG-focused audit practices helps ensure organizations develop sound audit operations that generate value and are equipped for the future. Here’s a look at key trends shaping the future of internal auditing:

1. Adapting New Technologies

New technologies are changing the internal audit function by automating low-value work and improving analysis. Some of the technologies that are currently being implemented are artificial intelligence (AI), machine learning, and robotic process automation (RPA). According to Caseware, data analytics has emerged as critical, with 21% of internal audit teams using data analytics in all audits and 57% using them in some audits. These tools help auditors to identify risks and trends and make analytical decisions in the current complex business environment.

2. Focus on ESG and DEI Audits

ESG audits have become a subject of discussion since organizations aim at satisfying the stakeholders’ demands as regards sustainability and ethical standards. Currently, internal auditors have a significant responsibility of evaluating compliance with ESG standards, including the relevance of ESG factors in audit plans and the potential of sustainability efforts. The same goes for DEI audits, which are gradually becoming indispensable as they assist an organization in checking its equity and encouraging breakthroughs.

3. Addressing Fraud and Cybersecurity Threats

The increased incidence of complex fraud and cyber risks has introduced new aspects to internal auditing. Another emerging role of auditors is to identify and mitigate different kinds of fraud, such as embezzlement and fraud in reporting, phishing, and identity theft. Such risk can be managed with the help of advanced fraud detection tools that should include compliance teams.

4. Agile and Flexible Audit Methodologies

With risks changing as continually as they do, there is a growing trend towards agile auditing. This methodology also makes audit teams more flexible and oriented to the specific objectives, which can be changed depending on the emerging risks. Deloitte has reported that the use of agile activities within the internal auditing profession has increased by 48% of internal auditing functions that have embraced agile methods to enhance their operations and value. This change is being propelled by the need to get faster and more flexible solutions to new risks that are arising in the world. Therefore, agile internal auditing assists teams in delivering increased value and timely information, reducing audit cycle time, and enhancing stakeholder communication.

5. The Talent Challenges and Skills Evolution

The market need for specialization in audits, particularly in technology, ESG, and fraud, has created talent acquisition gaps. According to PwC, many organizations are spending on their human capital, training, and development for new competencies, especially in areas such as AI, data analytics, and ESG. Also, claims and work integrated with other departments and the use of external consultants have become crucial for sustaining audit quality.

6. Expanding The Scope of Internal Audit

The internal audit function is thus no longer a limited role in conducting financial or compliance audits. According to RADD LLC, it now has a remit that is wider than public services and covers culture audits, operational resilience, and strategic risk management. This expansion is due to heightened demands from leadership teams to get more than purely audit information and to bring more value to their organizations. With this enhanced scope, internal auditors have an important role in the creation of sustainable and proactive businesses.

Conclusion

In the future, technological advancement is set to continue growing, internal auditors are likely to pay more attention to sustainability issues than before, and the scope of internal auditing is set to become more strategic than it is today. In this way, internal audit teams are able to use technology, manage new risks, and promote cooperation in order to become valuable members of an organization in a changing business environment.

Charles Financial Strategies LLC is in a position to offer a consulting service on the challenges facing organizations in internal auditing. Dr. Sabine Charles and her team have solutions for all of your audit needs, from handling cybersecurity threats to implementing agile processes. Join us today and prepare your organization for effective internal auditing in the coming years.

Sources:

Deloitte 2024 Internal Audit Trends Report
Caseware: 2024 State of Internal Audit Trends
RADD LLC: The Evolving Landscape of Internal Audit 2024
PwC: Global Risk Survey 2024

Adapting to A Changing Landscape through the Future of Internal Auditing Trends