Nowadays business practices and approaches are undergoing significant changes. Different business models like high touch business, Peer-to-peer business, hidden revenue business models, etc. are adopted globally, which bring new challenges and opportunities.
Technology will be the biggest influence on the business environment and it has become an integral part of internal audits. On Tap external expertise is needed in every aspect of business and the focus of business is more and more towards compliance and integrated governance they expect internal auditor to have vision and encompass all aspects of governance.
Global emerging trends in internal auditors’ services include:
Fraud vulnerability assessment – Introduces to mitigate vulnerabilities in the IT environment and the risks associated with them. The companies introduced the Vulnerability Management Policy to establish the rules for the review, evaluation, application, and verification of system updates, hence the purpose of reviewing the same is to minimize the risk of fraud. It requires an in-depth study of various SOPs of the company to highlight areas that are vulnerable to fraud. Risk Profile is unique for every business model. It is always important that we suggest practical solutions to reduce fraud risk to companies.
Third-Party performance – Risk that a third party will impact your compliance with legislation or regulation. The risk is that a third party could damage your revenue or reputation. It is expected from an internal auditor to provide the assurance that these risks are being addressed effectively, especially in the case of critical or high-risk third parties. As IA it’s important to check that third-party agreements have a “right to audit” clause included and that third-party due diligence processes and controls are aligned. A closer look at third-party relationships becomes more important in the case of overseas parties, which can be achieved by optimal utilization of a centralized repository of all third-party information.
Posh investigation – Two types of posh audits can be conducted namely – Basic posh audit that includes verification of Documents, Compliances & Processes followed during inquiries, and Safe workplace audit that includes POSH, Gender, Culture & More. If the organization does not comply with the Posh act common ramifications they face are poor public image, high legal costs, low yield of employees, resignation, etc.
Dispute and crisis management – Internal crisis be fraud, major error, industrial accident, fire, etc. or external crises geo-political, terrorism, natural catastrophe, etc. or a combination of both in avoid such situations it is important for Internal auditors to provide overall assurance on strength and robustness of operations to crises management. As a preventive measure nowadays organizations always prefer to have a well-structured crisis management team.
EGS audit – For the Sustainability of the organization it is important to assess the risks related to Economic, Social, and Governance aspects. In an EGS audit, IA authenticates the correctness of the ESG-related data that a company discloses to its key stakeholders. Giving 360 views on people, process, and product is a part of ESG audit. EGS-related risks are usually outside the internal audit’s typical scope hence it is important to Integrate ESG Audit into the existing Audit Program. ESG revelations are covered by various standards like Global Reporting Initiative (GRI), Sustainability Accounting Standards Board(SASB), UN Sustainable Development Goals (SDGs), and Task Force on Climate-Related Financial Disclosures (TCFD) Standards, to avoid overlap with other compliance obligations it is important to take integrated risk management (IRM) approach and make most of these synergies to reduce duplication in ESG audit process.
Apart from the above areas as an internal auditor, we need to put more focus on Compliance review, whistle-blowing, ERM roadmap and setup, Benchmarking review, sustainability reporting, corporate intelligence, etc.
Internal auditor services are considered as value chain hence as an internal auditor it is important that various Operational aspects such as RCM/IFC setup and review, policies and SOP design, data analytics and visualization, strategy, and implementation support, etc. should be checked.
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