CAE and Digital Transformation
Chief Audit Executives (CAEs) are now required to monitor how technological innovation is changing their organisations and to understand the corresponding changes to risks and controls increase the value contributed to the organisations they serve.
That is why CAEs should focus on organisational and departmental digital transformation initiatives to make the leap to more advanced analytics applications such as continuous risk assessment, automation, and Artificial Intelligence (AI), followed by keeping up with a rapidly evolving cybersecurity landscape. This article shares insights by industry experts on how CAEs could deal with digital transformation at a departmental level as well as organisation wide.
How CAEs could enable departmental digital transformation
To digitally transform your department, as a CAE you could start by standardising your department’s process and afterwards consider the following:
- Automation and AI capabilities: Leverage automation for routine tasks explore robotic process automation (RPA) opportunities to reduce labor-intensive testing.AI has the potential to enable internal audit functions to comprehensively and continuously review large data sets rather than random samples.
- Advanced data analytics: advanced analytical tools offer forward-looking capabilities that allow the internal audit team to “better understand the financial impact of key strategic and operational decisions.” Data from social media, provides new insights for internal audit.
- Upskilling a future-fit IA team: internal audit functions need a broader range of skills, including experience with IT as well as more traditional audit competencies.
- Adopt agile methods: to provide faster, deeper and more valuable insights. Agility is the ability to move quickly and easily. It takes time, energy, persistence and cultural acceptance for audit teams to embrace an agile delivery framework fully. In making the business case for agile:
- Building a more agile internal audit function: taking a “six-plus-six approach to audit planning, where they plan out the next six months and have a plan for what they would do in the following six months, appreciating that it is all subject to change as the most important risks change.”
How CAEs could advise their organisations digital transformations
CAEs must balance priorities and resources to help the organisation address the risks it faces today, anticipate emerging risks and provide business insights that may help management gain a competitive advantage.
- Understand organisational digital transformation. As organisations modernise applications, data, and infrastructure, CAEs should increase their knowledge of a variety of emerging technologies, even absent an established use case. Exploration and familiarity necessarily precede adoption.
- Digital transformation projects. CAEs can help their organisations realize value in technology investments projects by taking leadership roles in the strategic transactions, and the project management of the integration new technologies. identifying the types of controls the business should consider, way in advance of their implementation, and assuming an independent oversight role to ensure effective project management and reporting.
- Innovation. For internal audit (IA) to sustain its relevance, IA should be engaged in the organisation’s innovation. CAEs could also lead innovation efforts by creating useful digital tools for other functions.
- Focusing more on IT and cyber audits. IA anticipate and respond to where the greatest risks lie—such as IT and cyber risks. Half of the audit schedule should on IT and cyber risks
- Partner with Chief Information Security Officer: it’s crucial for CAE to continuously align with CISO to get outside-in perspectives as well as maintain ongoing dialog with their IT and security stakeholders on which cyber audits rise to the top of the list.
The Future CAE
As CAE who wants to stay at the forefront of transformation be prepared to expand your role beyond assurance and compliance in order to serve as a dynamic advisor and strategic partners to their organisation. The world is changing every day, and this has an impact on business and related risks. It is crucial to stay informed, embrace technology, focus on value addition, and continue to embrace development. This may prove to be a journey through new and uncharted waters for you, but if you are a CAE that can continuously adapt while still providing value, the future has the potential to be incredibly bright.