Becoming a next-generation internal audit function shares more than a few similarities with big-wave surfing. Both require overcoming trepidation and committing completely. There are also different forms of knowledge to acquire, unfamiliar challenges to navigate, and new skills and competencies to develop.
To build and manage a next-generation function, internal audit leaders and teams have a host of their own governance, methodology and enabling technology competencies to hone. The results of our latest Internal Audit Capabilities and Needs Survey show that most audit functions need to quickly improve their acquisition and development of next-generation auditing skills.
In fact, in rating their competency levels for different areas of next-generation internal audit governance, methodology and enabling technology, chief audit executives (CAEs) and internal audit professionals provided scores that are among the lowest levels in our entire survey.
These findings should serve as a wake-up call for internal audit leadership. Next-generation auditing capabilities, processes and tools — from strategic vision, agile auditing and dynamic risk assessment to artificial intelligence (AI), machine learning and process mining, among others — should be pressing priorities for the internal audit function to build and grow as their organizations continue to transform and stakeholder expectations for these capabilities rise. Our results show that audit committees certainly hold this to be true. At present, too many internal audit teams are not adequately prepared to commit to difficult but necessary transformation.