Evolution of Internal Audit in Information Technology and Security.
Technology is clearly affecting how audits are performed today and how they would be conducted in the future. In the past, there was generally an anticipated error rate when an auditor used to rely on statistical sampling technique on a batch of invoices. However, now having remote access to all of a client’s data has allowed the implementation of new, improved data and analytics (D&A) procedures that can verify every single transaction, ensuring that any error is a major error.
The pandemic has not only changes the way of auditing but also accelerated technological investment in continuous auditing. As a result, auditors also have become analysts. This shift allows auditors to give more significant insights into organizational processes, as they are now aware of the entire process life cycle and the related technologies. To be effective, an audit must help managers and business directors achieve their strategic objectives. Future audits must meet this challenge, or auditing itself could become obsolete.
The future auditor needs to be equipped with specific skill sets to take a multidisciplinary approach. The challenges the auditor has to meet include:
• Ability of management to make appropriate decisions during times of stress
• any cultural concerns arising from employees ability to adapt and respond to the crisis
• Financial resilience and liquidity
• Dependencies on suppliers and third parties
• Disadvantaged customers
• Effectiveness of business continuity plans
• Adequacy of IT systems.
There are three important areas in which technology will alter the face of auditing:
1. Cognitive Analysis
Cognitive analysis, or AI, has the ability to shift through massive amounts of data and perform digital analyses in ways that are difficult for teams of auditors. Artificial intelligence, which leverages algorithms to identify and understand patterns and anomalies within data sets, can help internal auditors more efficiently identify areas of risk and execute many other tasks at warp speed.
2. Machine Learning
While machine learning typically seeks to extrapolate broad patterns. Whereas auditing focuses on analyzing historical events, machine learning solutions tend to predict future events. Lastly, most auditors lack the necessary education or coding skill set to proficiently experiment with machine learning in their work.
3. IRA and RPA
RPA (Robotics Process Automation) entails a bot or software application that can be programmed to perform basic human tasks that are typically rote or manual in nature. Robotics Process Automation has been one of the biggest buzzwords in the financial and tech industries. Robotic Process Automation is the creation of bots that can interact with data just like a human would, but bots have an advantage. Since bots are software, these can operate continuously without making mistakes like people
The future of audit is no longer hypothetical. The future is here, and change is being accelerated by the COVID-19 pandemic, which is providing the impetus for more advanced technologies and innovations that will benefit the future of audit.
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