The role of the internal auditor has changed significantly in recent years, with many organisations now relying on them to help achieve their strategic goals.
In the past, audit was primarily seen as a form of “defence” – helping improve internal operations by evaluating procedures and processes and ensuring accurate and timely financial reporting. It was a fairly static role and largely backwards-looking to ensure that processes were working correctly and to identify any areas that required fixing.
However the internal audit role is now seen as a strategic partnership role, with the ability to add value by identifying gaps in resourcing and improving efficiencies through practical recommendations to enhance business operations.
Boards and senior management are increasingly recognising that they can use internal auditors to play a big role in the company’s ongoing success.
Internal audit is now taking a forward-looking approach to ensure a company is adequately resourced and equipped, both for business improvement and efficiency, and also in risk management.
An internal auditor’s recommendations can act as road map for the organisation identifying gaps and adding value by considering the resources available (financial, operational and technological), which can aid an organisation to achieve its pre-determined goals.
With risk management, the growing use of technology has created an interconnected world where everyone is vulnerable to risks such as geopolitical tensions, economic turmoil, or cyber hacks.
This is particularly critical as the legal obligations of directors overseeing the affairs of a company become more stringent. This requires them to be fully up to date on what is happening at a company, including its financial position and its risk management processes.
Those companies that aren’t working with their auditor, and other experts, in this way, risk being left behind as the pace of change in the business world continues to accelerate.
This article was first published in Financial Times – Winter 2024.