PARTNER EXPERIENCE INTERNAL AUDIT: THE FOUNDATION TO MANAGING RISK

Gissela PACHECO Audit & Assurance Senior Manager www. tgs-sarrio.pe

Where to begin?

As the COVID pandemic steadily evolves, new challenges continue to emerge, forming a brand-new, hybrid world. Because internal audit is also transforming, it is rapidly becoming a strategic tool for developing a new risk matrix that addresses the requirements of each company while redirecting its operational efforts. The internal auditor is transforming into a business consultant aiding in addressing uncertainty.

Unsure of where to begin?

A starting point is the realization that the internal audit function must have an operational orientation; it must integrate harmoniously with corporate governance and provide consistent, transparent information.

One of the first challenges for novel internal audit is automation. COVID-19 acted as a trend accelerator, speeding up digitalization, telecommuting, and reliance on technology. Those three factors driving the transformation are not mere trends. As technology continues to develop, automation will persist. Software, hardware, vulnerabilities, and opportunities are already evasive targets. Unless internal auditing takes place, nobody can identify the business value of automation.

When should the internal auditor enter the game?

The internal auditor must be involved from the beginning of the automation decision-making process. Ideally, his role will include advisory and assurance components to assist the organization in achieving the desired performance, followed by implementation assurance services. Simultaneously, the new environment will set the tone for the auditing plan and risk assessment of new capabilities in key risk domains such as finances, operations, regulations, technology, and strategy. The program will ultimately establish priorities based on data regarding impact and vulnerability.

Where are the most significant hazards?

Risk in Focus 2023, a report compiled by 15 Internal Audit Institutes in Europe, including Spain, provides an overview of the primary risks facing internal audits over the next three years. A growing number of intricately intertwined highimpact hazards pose a threat to businesses.

The report offers a list of what interviewed internal auditors perceive as top liabilities:

• Cybersecurity and data protection: at the top of the list because of the rise in cyberattacks.

• Regulatory change and compliance: sustainability-related regulatory issues trigger this risk.

• igitalization and emerging technologies urge evolving platforms to be monitored by vigilant businesses.

• Diversity and talent management: the pandemic has exacerbated the shortage of qualified workforce and altered work practices.

• Business continuity and crisis response: companies face this risk by capitalizing on lessons learned.

Making internal auditing more agile can help firms anticipate and respond more effectively to changing business risks, regardless of the organization’s type or state. Internal audit adds value and provides timely responses to strategy risks and emergent, unusual eventualities.