Role and Responsibilities of Internal Auditors in 2021

Role and Responsibilities of Internal Auditors: The main challenge for internal auditors how to adjust, be flexible and also be relevant in this new environment of radical changes in the technology. For internal auditor professionals, this is virtually new world with new statutory requirements and constant innovations in technologies. There is no option for internal auditors than to adapt in this new scenario with more and more unknown risks. It is obvious that internal auditors will have to redesign their auditing processes.

Role and Responsibilities of Internal Auditors

It is also challenges for regulators also to be relevant and update in this new envirnoments. Boards and audit committees will have to overhaul their earlier concepts and mindset on audit and arrange resources and trainings in this new scenario. The Internal Auditor of the Future would have to update themselves with new mindsets, skills with training and the ability to analyse the big data.

In this innovative scenario, internal auditors are confronted with difficult situations in three main areas:

  • The overall change to distant working which has effect on properties(assets), administration and also internal auditors’ scope in view of the facts that existing procedures are not applicable in this new scenario.
  • b) Unknown emerging risks, in the areas of digital security.
  • c) For new plan of actions for internal audit processes which include creative methods and skill sets due to effect of COVIT-19.

Preparation of future Internal audit

For preparation of future internal audit, these following Audit measures are needed –

1. Compliance of Data Privacy regulations should be in the eyes of IA. During recent years, there has been sea changes over statutory legislations over the globe.

2. Fresh Cyber Security legislations from the SEC and PCAOB will need more internal audit participation. Cyber piracy in recent years multiplied and these legislations are insisting public companies including Internal Auditors to make less risky or affordable to avoid as much as Cyber piracy.

3. Third-party risk management has been bone of contention. Over the recent years over the globe, it has been a practice to off- load the production and services to cut cost. This tendency will grow only. These third parties leak sensitive data of principal companies to other companies to prosper their business interests. How to handle these third party risks in future is also concern of internal audit.

4. Internal Audit is considered as last defense of organisations. Piece meal solution of risks is defective and leave many risk unaddressed. Integrated Risk Management (IRM) is buzzword in recent world in internal audit. Integration of technology, processes, information, departments or organizations in any organization is very important so that all sorts of risks can be mitigated. IA should be the front runner in all these IRM programs due to their capacity to pinpoint risks and address controls and provide solutions for these risks. This is the trend of future internal audit.

5. Additional and appropriate skills and expertise are must for IA now to cope with new scenario. To survive in changed environment, innovation and adaption by internal auditor is only way forward. If internal auditor fail to adapt in this scenario, they will have quit the profession. Apart from knowledge in accounts, adhering to a required regulations, finance, cost accounting, the entities are looking with skills and expertise in the areas of data science, analytics, IT, cybersecurity, and privacy laws. All such skills are not expected to be in one person. However, each internal auditor should be conversant with some qualification in the areas of data science, analytics, IT, cybersecurity, and privacy laws to survive in internal audit profession.

6. In this changed environment, additional outlay will be required to be made in internal audit department. Apart from routine jobs of chief of internal audit, it is his primary duty to arrange sufficient infrastructure in internal audit department to reach the desired target of board of directors. Chief of internal audit will have to make presentation to board of directors on additional budget elaborating likely emerging multiple risks in the changed scenario. Internal audit need convincing board of directors in a do or die situation where cost of data piracy is three times than the cost of compliance of relevant legislations.

Also Check – Future of Internal Audit

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