The Next-Generation Internal Audit Journey Needs To Begin Now
A global pandemic caused by a rare airborne virus that continues to affect organizations in different ways around the world … a growing number of stakeholders in organizations with whom internal audit needs to partner … digital transformation and innovation initiatives occurring enterprise-wide and in individual departments and functions … business models and a risk landscape with seemingly shorter cycle times than in years past.
According to Protiviti's 2021 Next-Generation Internal Audit Survey, most of the chief audit executives (CAEs) and senior internal audit leaders surveyed reported that their teams are still in the early stages of, or have yet to embark on, their next-gen internal audit journeys. The results also reveal relatively low maturity levels in different areas of Governance, Methodology, and Enabling Technology. But what perhaps is most telling is organizations' skill and capability levels and internal audit functions that we classify as "Digital Leaders." These organizations are reaping the significant benefits of next-generation internal audit practices, given their substantially higher reported levels of maturity in these areas. The adoption of digital transformation is rising at a rapid pace in the Middle East. As per the survey results, 21% of the organizations are categorized as Digital Leaders against 20% globally.
After a challenging 2020 that required many internal audit functions to reprioritize projects, it's now time to refocus efforts on embracing the next generation of internal auditing as the new normal.
Key Takeaways From Our Survey:
- Progress remains slow: Next-generation internal audit journeys are just beginning — For CAEs and internal audit leaders as well as other internal audit professionals, self-reported maturity levels are primarily in the midrange, with lower scores related to adoption and use of enabling technologies.
- Digital Leaders stand out — With regard to next-generation internal audit capabilities, there is a clear difference in the skill and maturity levels between Digital Leaders and other organizations.
- Digital maturity remains a rarity, but progress is evident — Most internal audit functions are just getting started on their next-generation journey: A clear majority rank both their organization and internal audit department below the Digital Leader level.
What You Need to Know:
- The adoption of digital transformation is rising at a rapid pace in the Middle East.
- 82% of the respondents in the Digital Internal Audit leader category believe that they were able to generate medium to high levels of returns on investment globally as 41% in the Middle East.
- 58% of Audit Committees in the Middle East have shown medium to high level of interest in understanding the transformation and innovation activities undertaken by the internal audit functions.
- 75% of the respondents in the Middle East were of the view that though the impact of COVID-19 on audit execution was high, teams were able to execute audits remotely.
- Amongst all the organizations, there has been a notable increase in the level of concern for data security and privacy issues as a result of people, processes, and technologies shifting to remote working models.
The journey toward becoming a next-generation internal audit function is neither easy nor quick, but it is highly worthwhile. In our white paper, The Next Generation of Internal Auditing — Are You Ready?, we provide a call to action and roadmap for internal audit organizations to begin their next-generation transformation journey.