Transforming Internal Audit: From Compliance Checkers to Strategic Partners
When I first started my career in internal audit, I viewed the role as a back-office function - primarily focused on compliance and the third line of defence. However, my perspective shifted dramatically after witnessing a massive data breach at a technology firm, which compromised thousands of customer records. This incident exposed how traditional, siloed approaches to risk management were inadequate for addressing complex, evolving threats. It was clear that internal audit needed to embrace a more collaborative strategy to prevent such issues effectively.
This shift in perspective mirrors the broader evolution of internal audit. Gone are the days when our role was limited to ticking boxes and ensuring compliance. Today, internal audit has transformed into a strategic advisory function. Instead of following a checklist, we must now engage proactively with various departments to tackle potential risks before they become significant issues.
Collaborative Risk Prevention
To truly excel, internal auditors need to focus on collaboration:
Engage key stakeholders: Building relationships with senior management and different business units allows us to gain insights into strategic plans and potential risks. I found this to be incredibly valuable during my time with a manufacturing company. Regular breakfasts with the head of operations provided me with insider knowledge about upcoming supply chain expansions, which in turn allowed me to offer timely risk management advice.
Share insights from audits: During an audit at a financial institution, I uncovered cybersecurity vulnerabilities that needed immediate attention. Rather than keeping these findings confined to my team, I organised a workshop with the IT department. This collaborative effort led to the implementation of stronger security measures and a heightened awareness of cybersecurity across the organisation.
Build strong relationships: Trust is essential for effective collaboration. When internal auditors establish trust through regular and open communication, it sets the stage for timely action on critical issues like potential fraud risks, ultimately enhancing organisational resilience and risk management.
Aligning Audit Objectives with Organisational Goals
To drive meaningful change, aligning audit objectives with organisational goals is crucial:
Provide independent and objective assurance: Going beyond mere compliance, independent assurance on internal controls safeguards the organisation’s stability and promotes robust governance. Identifying governance gaps through audits can prompt corrective actions that strengthen processes and ensure long-term stability.
Proactively identify and mitigate risks: Anticipating and addressing risks before they escalate is key. Implementing measures to counter emerging threats, such as phishing attacks, helps significantly reduce risk exposure and safeguard sensitive data.
Offer value-added insights: Internal audit plays a key role in enhancing operational success by identifying inefficiencies and recommending practical improvements. These insights help streamline processes, reduce costs, and ultimately contribute to the organisation’s success.
Elevating Internal Audit
The true impact of internal audit is realised when we integrate our audit objectives with strategic risk management. By embracing collaboration, staying strategically proficient, and engaging proactively, internal audit can evolve into a key advisory role that supports organisational excellence and resilience.
Kingston Low is a thought leader in internal audit and risk management with over 20 years of experience in driving business innovation, operational excellence, resilience, and sustainable growth.
