The internal audit function must adapt to meet the evolving demands of the turbulent Fourth Industrial Revolution. By embracing the concepts of intelligent organizations, digital business agility and a flux mindset, internal audit can maintain its significance and relevance and become a key player in driving organizational innovation for success.
Here are nine key practical tips for how to use internal audit to drive organizational innovation:
- Embrace a forward-looking approach—Shift from a traditional retrospective analysis to a more consultative and predictive approach.
- Foster a flux mindset—Embrace and feel comfortable with change as an ongoing aspect of the business in addition to developing more effective response skills to cope with change.
- Be agile—Embrace agile culture and methodologies in the audit process by promoting quick execution and being responsive to changes in the business environment. Audit plan methodology and procedures should be adapted accordingly.
- Act as an enabler—Implement content validity approaches, such as an expert panel inter-rater agreement for reconciliation, to overcome setbacks arising from professional disagreements among decision-makers concerning innovation within the organization.
- Lead a decision-driven culture—Strengthen the factual foundation of your audits through professional and academic research, benchmarking, advanced data analytics and methodologies. Leverage advanced data analytics tools and techniques such as artificial intelligence to gain insights from large datasets and codified knowledge. Analyze trends, patterns and anomalies to efficiently and effectively pinpoint areas that require attention.
- Master technology knowledge and proficiency—Stay informed of recent digital technologies. Develop a comprehensive understanding of the potential impact of these technologies on business processes, products and services by actively applying these technologies in internal audit processes, gaining valuable hands-on experience.
- Promote collaboration and knowledge sharing—Open communication, idea-sharing and collaboration are key to driving creativity and exploring new possibilities. Act as a platform for the expression of unspoken internal and external perspectives.
- Stay tuned in—Continuously invest in professional development and stay informed about industry trends, technologies, emerging risk and best practices related to innovation. Attend relevant conferences, seminars and training programs.
- Conduct an open-innovation approach—Expand your incoming knowledge funnel by engaging with other auditors, industry experts and professional networks. Seek external perspectives and benchmark against industry standards to gain better hyper-sensitivity skills and foster creative insights.
Editor’s note: For further insights on this topic, read Noam Koriat’s recent Journal article, “Internal Audit as a Driver of Innovation,” ISACA Journal, volume 4, 2023.