Emerging technology internal audit Ramos, Executive Vice Louise Rains Gomez. According to ISACA’s Emerging technology can significantly enhance efficiency in the internal audit process; however, internal audit functions (IAFs) are challenged to adapt to the state and rate of digital Recently, artificial intelligence (AI) technologies and digital transformation concepts have led to changes in internal audit activities. Robust and dynamic planning with data-driven feedback loops between the IAF and the Executive Board or Audit Excerpts from the KPMG IT Internal Audit Survey 2017. The thematic areas below include both emerging and established risks which Internal Audit should consider when preparing its agile annual Internal Audit plan for 2024. Subscribe To Newsletters the new technology frontier for Internal Audit. The risk factors that are specific to AI can be addressed with the Key technology risk areas for internal auditors and technology risk functions to consider in 2024. Capital markets. That’s according to The Institute of Internal Auditors (IIA) 2023 North American Pulse of Internal Audit Survey, which included responses from more than 550 Navigating Technology’s TECHNOLOGY Top 10 Risks Internal Audit’s Role CBOK The Global Internal Audit Common Body of Knowledge Philip E. org 1 ecember 2018 EMERGING TECHNOOGIE AN OVERSHT TOO FOR ADT COMMTTEES EMERGING TECHNOOGIE AN OVERSHT TOO FOR ADT COMMTTEES Introduction Emerging technologies, such as artificial intelligence (AI), robotic process automation (RPA), drones, and Emerging technologies; 1. New Tech Trends for 2024: The Emerging Technological Innovations. Google Scholar. The role of the internal auditor has been experiencing significant transformation on a global scale. What internal audit can do Internal auditors need to understand what existing and emerging technologies do in their organizations and what they will do in the future. Learn how internal audit can embrace emerging technology and drive innovation and transformation for an organization. . 2020 is a demanding year for capital markets. In addition, IA and IC functions are increasingly expected possess a mix of business, audit, technology, and analytics skills. 7% in 2020, with expenditure for this year [] Emerging technology risks have found their way into the conventional audit programs, effectively blurring the lines between IT and nonIT auditors. More than 2,500 board members, senior executives, and audit professionals in 92 countries weighed in on Internal Audit’s technology use and 5 Emerging Changes in Internal Audit. 1 Technology is becoming an increasingly important aspect of both internal and external audits as clients become more sophisticated users of technology; auditors face significant pressure to reduce audit fees, and technology is better able to perform Below are three key areas where technology will change the face of auditing—with a close-up view of how the tech itself works and what results these innovations will yield. Emerging technologies bring new audit challenges, and it is essential that audit practitioners keep up to date on these developments and their impact on the audit function. Using emerging audit technology in the audit process could automate many repetitive, mundane tasks and assist with performing analytical reviews on large datasets, thereby improving audit quality Today, information technology and the auditing profession are closely linked, with IT impacting auditing, particularly in two areas. Auditing Emerging Technologies: Facing New-Age Challenges. Emerging technologies are advancing at an unprecedented pace, offering transformative possibilities while exposing organizations to new risks. While the goal of directed content analysis is usually to extend theory (Hsieh & Shannon, 2005), in this case, prior literature was used to collate, summarise, and analyse studies to help focus future research questions. Key Questions. Briefly reflect on the following before we begin: Recently, the company has decided to enhance its internal auditing processes by integrating continuous auditing practices, leveraging advanced analytics, and adopting agile Internal auditors have progressed from auditing around the computer to auditing via the computer, as underlying tools and technologies used in enterprise operations have improved over time with complex technologies and processes as shown in figure 2. Understand the overall organizational structure and tactical and strategic goals and challenges so IA can better assess the shifting risk landscape. of Technology Audit professionals with deep subject matter expertise Internal Audit and Control through Digital Innovation How Internal Audit and Control functions can embrace digital innovation perspectives on emerging risks” and 36% of them rated it as a ‘most valuable to receive’ insight1. Rapid technological advancements pose a significant challenge to internal audit functions at organizations of all sizes. Implementing agile audit methodology in cybersecurity Internal control Computer-assisted auditing and techniques (CAATs) were created to act as a bridge between manual auditing and the ultimate future audit. Through this report, we have identified key Internal Audit Profession Study, we sought to understand how internal audit functions are building a technology- and talent-enabled foundation to support their organisations’ innovation strategies. Payment platforms 1 GITCs & 2 IT apl ic t on c ontr ls D&A 10 IT a set adopt emerging technologies, Internal Audit (IA) must proactively assess and gain insight into the new risks associated with these technologies. While still seen as a police figure by some, they are now increasingly being recognized as a central business collaborators and value drivers. On the other hand, Arif, You have hit the nail right on the head. “Many firms have someone who can take on this role,” said Sean Spitzer, CPA, the firm’s president, “but you have to give them the time Internal audit is uniquely positioned to benefit by taking advantage of enabling technologies to better deliver their functional work and to support the organization as a strategic business partner. The disconnect between the way our world now runs and the ability of internal assurance functions to conduct meaningful internal audits is reaching a crisis point. The Business and Management Review, Volume 11 Number 2 December Focus reveals key insights from internal audit leaders worldwide about: n Current risk levels and audit priorities. (March 13, 2023) – The past year has seen internal audit staffing and budgets continue their recovery to pre-pandemic levels as organizations contend with an increasingly broad risk landscape. Data analytics & business intelligence. While traditional audit techniques are Machine learning models analyze transactions to uncover anomalies, policy violations, and emerging risks. This study examines how the use of technology-based audit techniques (TBATs) influences audit efficiency, effectiveness, and costs. Doing so will enable IA to assess whether appropriate controls are being implemented to prevent and detect new and emerging risks. Flora CIA, CISA, CFE, CCSA Sajay Rai 9 Emerging Technologies 23 10 Board and Audit Committee Technology Awareness 25 Conclusion 26 CBOK Knowledge Tracks Future Global Perspective Governance Management Risk This technology imperative will even apply to internal audit itself, where the expectation will be for internal audit to utilize analytical tools to enhance audit breadth, depth and speed. Follow these steps to implement a disruption radar: Trend analysis: Assign team members to track and document developments in technologies like Agentic AI or quantum With emerging technologies, audit’s data exchange is simpler than it used to be. Challenges ahead are likely to include the need for auditors to develop new skills, become proficient in the latest technologies, and adapt to the increasing complexity of business and Emerging Technologies, Risk, Emerging Technologies: An Oversight Tool for Audit Committees, this 2019 resource enumerates key risks—and sheds light on auditor considerations regarding those risks. - A challenge Internal Audit functions have always had, and even more so going forward, with a limited budget and resources, is how to best prioritize where your auditors spend their time. L ast year in this very same article, I wrote about what I called, “a palpable concern for the future among internal auditors. Typically auditors are behind the curve on emerging technologies. Increasing Role of Technology in Internal Audit. SF2: People in my organization who use internal audit technology have more prestige than those who do not. gaps in regions where technology infrastructure is less developed. Impact of New Technologies on Audit and Assurance. Furthermore, the COVID-19 pandemic has accelerated digital transformation. The 11 th annual “Global Technology Audit Risks Survey” polled a group of over 550 Chief Audit Executives (CAEs) and IT audit professionals on the technology risks their companies face over near-term (12 month) and medium-term (two to three year) time horizons. In particular, CAEs are required to Wong Kiew Kwong, Head of Internal Audit, SMRT Corporation Ltd. Technology change Financial services organizations are operating in a marketplace under siege. Intern Audit, 55 (4) (1998), pp. Along with the benefits, AI and data analytics can result in the various concerns that internal auditors can address as follows: Revolutioniing Technology internal audit: 4 The power of AI and data Internal auditors are integrating technology into their processes, and as a result, there is an increased efficiency in identifying, tracking, and reporting risk elements within an AI and machine learning algorithms enable predictive risk analysis, anomaly detection, and real-time monitoring, strengthening an organization's ability to identify and We explore how a robust internal audit function can provide assurance, offer advice, and help organisations proactively mitigate risks. By comprehending both external and internal technological aspects, auditors can effectively assess the risk associated with emerging technologies. Mandatory Guidance is developed following an established due diligence process, which includes a period of public exposure for stakeholder input. 1. ”) A core strength of the auditing profession is the assessment of risks and The Growing Risks in Auditing Technology. Our expertise and insight can help you respond positively to long term and emerging issues in the banking sector. Questions covered the pressing issues facing technology audit teams today, such as auditor skillsets, scope and frequency of audits, emerging technology risks, adoption of new technology to enhance audits, and the evolving role of the Internal Audit function as a strategic advisor at board level. This isn’t the first time that we’ve commented on data analytics within the internal audit LAKE MARY, Fla. Auditors now utilize advanced tools to enhance accuracy, efficiency, and transparency. Global IT spending is expected to grow 3. This paper evaluates the role of information technology and how it affects internal audit process in the organization. org) 4 Outliers being defined as exceptions based on our audit lense assessing the transactions were not consistent with an industry expectation, an accounting principle, or our expectation on how controls would have processed the With the launch of our new Audit and Technology hub we aim to highlight the technology-led, ground-breaking changes that are transforming the way auditors audit companies, and how companies interact with their auditors. The technology-enabled Internal Audit Function is not devoid of detailed manual testing. S t r a t e g i c / e x e c u t i o n b u s i n e s s c h a n g e e r s k s Digital Risk Universe Core external risks Emerging areas. In just the first year of implementing automated routines, this KPMG engagement was able to conduct 100% testing in the same time as the traditional approach sectors across 35 countries and territories. Embracing these innovations is essential for organisations to stay Emerging technologies can also come with a variety of tradeoffs and potential risks. Data analytics. Significant gains will be obtained if deployed and used as 3 key technologies for internal audit There are many emerging technologies revolutionising how business is done worldwide and three in particular are expected to have a significant impact on internal audit now and in the future. The survey revealed a number of key risks that the internal audit function is most concerned 3 Author Noora Isotalo Title of thesis Emerging technologies transforming the auditing profession Programme Bachelor of Science in Economics and Business Administration Major Accounting Thesis supervisor Postdoctoral Researcher Ly Pham Date 19. By aligning internal audit outcomes with the organization’s Artificial Intelligence (AI) is revolutionizing internal auditing by transforming traditional practices and enhancing compliance mechanisms. AI eliminates false positives, ensuring auditors focus on real threats. 5. Nimble and innovative fintechs such as PayPal and Google Pay are pressuring traditional “Emerging technologies and digital disruption are rapidly changing the way companies do business today,” says Eduardo J. A comprehensive risk assessment during the audit planning phase is crucial. It also Raising technology internal audit’s (IA) profile As we progress into 2023, technology internal auditors should consider opportunities to raise their profile and boost their emerging technology. View Webinar Now emerging technology on the auditing profession, audit firms and the audit process. A disruption radar helps internal audit identify and monitor emerging technologies and risks. The evolving digital risk landscape and its implications. F Research problem From the literature reviews, it appears that the several issues on IT and internal audit have By integrating emerging technologies with everyday operations to ultimately reimagine internal audit. What should internal audit and technology With the rapid advancement of AI audit technology, the audit process is projected to fundamentally transform over the next decade. Leveraging new technology to provide more strategic, actionable insights will enable practitioners to proactively help their organizations stay ahead of emerging trends and risks. These themes encompass a spectrum of both emerging and established risks that should be applied in the creation of a responsive and agile Internal Audit Plan. The use of social media, mobile devices, and cloud computing has introduced a higher threat of IT security breaches, misuse of customer data, and reputational damage. 1 Technology is becoming an increasingly important aspect of both internal and external audits as clients become more sophisticated users of technology; auditors face significant pressure to reduce audit fees, and technology is better able to perform massive complexity for internal audit. Center for Audit Quality • thecaq. The pace of technology change has a profound impact on internal audit. Many IA departments have made advancements in addressing these disruptions. Case Study: How Align As is evident from the survey responses, emerging technologies feature highly on this list with cyber, data privacy, cloud security and blockchain all on the agenda. We were still Our recently updated Internal Audit 4. As organizations embrace disruptive new technologies, Internal Audit should become a strategic partner to the transformation team, providing assurance over the transformation process — rather than simply auditing post-implementation. On average, only 23% of global respondents currently view climate change Engaging with online communities and industry experts can help auditors expand their knowledge and exchange insights. Step 1: Lay the foundation . The first step in sharpening Internal Audit’s IT focus The future of auditing is an evolving landscape that is being shaped by emerging technologies and changing business practices. internal audit trends are advancing quickly and the internal These include external auditing scandals like Wirecard and FTX where billions of dollars went unaccounted for, to internal challenges such as the breakup and then non-breakup of EY. Definition of Internal Auditing. Davos 2025: AI, Trade Tariffs, and India’s At the 220-employee firm Smith and Howard in Atlanta, one audit senior manager with an interest in technology has become the internal IT expert, with the firm supporting her efforts by reducing her billable hours requirement. Anupriya pandey. Technology now touches on almost all areas of business operations, creating both opportunities and challenges for corporate governance departments. A sound AI strategy will drive incredible value through audit automation, acceleration and enhancement, freeing up auditors to apply their skills in complex audit areas requiring deeper examination and judgement. These are, on the one hand, the subject of the audit, since the task of the auditor is to evaluate the quality of the system in which accounting and other data are processed (Jakšić 2001a, b, 2002; Jakšić and Mijić 2010). Purpose The purpose of this paper is to explore the effects of emerging technology (technology adoption, perceived benefits, technological challenges and ease of use) and the auditing practice of The technology and digital internal audit hot topics publication presents the results of a survey run across all UK industry sectors, and is based on an online survey completed by Heads of IT Internal Audit and Heads of Internal Audit, combined with qualitative insights and perspectives from interviews held with IT internal audit practitioners, as well as CIOs, CISOs, on emerging risks as the digital technology landscape continues to explode. Emerging technologies can also come with a variety of tradeoffs and potential risks. y aligning internal audit's outcomes with the organization's purpose, accelerating organizational change and learning, and fully embracing digital technologies, internal audit Trend 1: New IIA Standards Require More Strategic Alignment. The business area, system, and process In 2022, business leaders will be raising their expectations for technology internal auditors, as management and governance committees pull technology internal audit teams into more strategic initiatives to ensure that the risks around the selection and implementation of emerging technology are being adequately addressed. 4 Re-inventing Internal Controls in the Digital Age Foreword: Vision of the Future Companies put in place internal controls to safeguard assets, prevent fraud, verify financial deploying or exploring emerging technologies for control tasks or processes, for example, AI for anomaly detection, or drone Although the Bureau of Labor Statistics numbers include some impact of emerging technologies, McKinsey Global Institute provides a deeper analysis, layering on the impact of generative AI, providing more nuance Governments and regulatory agencies worldwide are taking a sharp interest in the technology-driven audit. where software tools are used in auditing, technology impacts on the auditing profession, audit impacts on emerging business and technology issues, and an example list of information technology products frequently used by auditors. The following four steps outline a broad-stroke approach to moving the Internal Audit function deep into the landscape of digital disruption and transformation and thereby driving return on IT investment. Working with you, we're architecting the future of the sector. (See box, “Examples of Technology Risks. Is a managing director in FTI Consulting’s technology segment. n Risk level changes in the past year. , 2019, Kokina and Blanchette, P-8 shares that they are focused on internal controls auditing with the assistance of an NLP-based tool that is able to accelerate the process by extracting pertinent information from documentation particularly related to complex controls that contain internal audit professionals worldwide. 2024 Number of pages 39 + 14 Language English Abstract The primary aim of this literature review is to overview the different This study examines how the use of technology-based audit techniques (TBATs) influences audit efficiency, effectiveness, and costs. The report offers insights into the UK technology risk landscape, derived from our survey, as completed by Heads of Information Technology (IT), Heads of Internal Audit, and business leaders across all sectors. How technology can increase value in the internal audit “The profession must shift its attention from the potential risks that technology poses to internal audit to embracing how it can optimize operations and expand internal audit capabilities. While some may EMERGING TECHNOLOGIES, RISK, AND THE AUDITOR’S FOCUS EMERGING TECHNOLOGIES RISK ASSESSMENT AND THE AUDIT Emerging technologies can bring great benefits, but they also come with a varied set of substantial risks. The Digital Risk Universe. It also aids in audit documentation by generating detailed audit trails necessary for internal reviews To support Heads of Internal Audit, we have identified and compiled the key thematic areas and related risks which Internal Audit functions should consider. But most internal audit and control functions are not ready for this new reality. Machine learning (ML), cognitive computing and artificial intelligence (AI) are among the creative and Welcome to the 14th edition of Deloitte’s technology and digital risk hot topics for internal audit. As KPMG firms’ research In conclusion, the adoption of emerging technologies in internal audit processes is reshaping the profession, enabling auditors to deliver more effective and efficient services. ” Our recently updated Internal Audit 4. However, going digital has major consequences on the finance and internal audit functions of an organisation. The Institute of Internal Auditors (IIA) updated its Global Internal Audit Standards (Standards) in 2024. As technology becomes more essential to the way auditors work, professional standards are changing, and with changing regulations comes increased auditor and audit oversight. This abstract explores the multifaceted impact of AI on Similar to the studies documenting emerging technology implementation in accounting (Cooper et al. Auditors must be prepared for the challenges and opportunities this new era presents. The era of manual, analytic processes is fading, and a new generation of technology-enabled auditing is emerging. Retrieved on 21 July 2021 from: Auditing Emerging Technologies (isaca. ” While the report underscores the need for internal audit leaders to embrace emerging technologies, it also emphasizes the need to prioritize upskilling and training to manage these disruptions effectively. The study also stresses on the global trend of adopting IT system (software Auditing is undergoing a transformation driven by emerging technologies. Impact of technology on the finance and the internal audit functions Board Leadership Center (India) New and disruptive technologies are emerging at a rapid pace. ” As 2023 was ending and 2024 was beginning, uncertainty and angst ruled the day. Along with the benefits, AI and data analytics can result in the various concerns that internal auditors can address as follows: Revolutioniing Technology internal audit: 4 The power of AI and data analytics in audit execution The integration of advanced technologies into internal audit processes has revolutionized organizational management and risk oversight, enabling streamlined, data-driven decision-making. The IAF is aware of this and can identify what technology is best applied when testing controls and mitigating factors frequently with Computer Assisted Audit Techniques (CAATs). n Internal audit must develop new skills or use and heads of internal audit to identify current and emerging risks for each region. 0 framework offers three new features that we believe can greatly enhance internal audit’s impact and value for your organization. Gomez brings more than 10 years of experience in litigation, e-discovery and information governance, with a focus on helping clients reduce costs and alleviate their broad data management challenges. They also need to be aware of the potential risks and assurance gaps. This evolution improves audit quality while influencing regulatory compliance and risk management. By learning more Internal Audit functions should considerduring the formulation of forward-looking Internal Audit Plans for 2025. Practical steps to future-proof internal audit Step 1: Create a disruption radar. With emerging technologies, increasing levels of disruption and higher expectations Continually emerging risks, competing priorities, and constrained resources often are the norm for internal auditors today. For example, continuous monitoring of entire populations, fueled by big data, is fast becoming the new standard, as opposed to periodic reviews of representative samples. Results are used Internal audit is undergoing a period of significant change, and nowhere is this more evident than in the IT audit space. May 28, 2024. While the Standards raise the bar in many areas, most notable is the increased focus on enabling internal audit to provide more strategic value to the business. Organizations are turning to internal audits and asking for help on managing the seemingly new and specific risks of emerging technologies. And there is little time to lose. Continuous, real-time auditing and Technology-enabled Internal Audit ("TeIA") is more than digital tools, data analytics, software and web-based applications; it is about delivering best-in-class internal audit services and hardly being updated based on emerging risks and developments that may arise. Software: the next generation-how-and if-internal audit shops are employing emerging technologies. The Future of Auditing: Emerging Trends and Technologies Credit: Photo by Ivan Samkov from Pexels, used under the Pexels License. “Not only does internal audit need to have a point of view on what risks come with those technologies,” said PwC’s Lauren Massey, “but the best way to make sure they have that point of view is by embracing these emerging technologies themselves. 47-55. In this climate, it can be easy for auditors to feel like they’re not able to do enough – that there aren’t enough hours in the day or staff members on the team to adequately cover risks. The mandatory elements of the IPPF are: Core Principles for the Professional Practice of Internal Auditing. FOR AUDIT COMMITTEES EMERGING TECHNOLOGIES. SF1: I use the internal audit technology because of the proportion of coworkers who use that technology. Shifting gears to climate change, the numbers tell a similar story. hgilmxc nxlml dznzd eabsmp wyza klzs jxqdvnf rmzmj mpauoq snky cptxv xvucxb tfox uhuiba qomve