Future Proofing And Elevating The Role Of Internal Audit

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  • Future Proofing And Elevating The Role Of Internal Audit

Future – proofing is the process of anticipating the future and developing methods of minimizing the effects of shocks and stresses of future events.

It involves designing a software, a computer, etc, so that it can still be used in the future, even when technology changes. The Banking industry is embracing innovation as a necessity to accelerate the market responsiveness and deliver quality products faster.

With this speedy development, the role of internal audit which is; to evaluate the adequacy of internal controls put in place, recommend improvements, assess compliance with regulatory bodies, ascertain consistency with established objectives and if the operations have been carried out as planned, is evolving to a modified role such as “strategic partner” due to the changes in business environments.

For this reason, there is a need for a methodical adjustment of audit roles within organizations to assure, advice and anticipate risk most effectively.

Internal Audit activity helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. The concept of internal audit has developed gradually over time. Internal Audit has feasibly beensubject to a greater pace of change over the years due to the rate of technological advancement.

Internal Audit need to respond to the rate of change as the years advance. It must respond effectively to the various challenges to remain relevant. Failure to evolve will erode the impact and value internal audit can bring to organizations.

Internal Audit should therefore respond to the following: The Business environment refers to factors (both internal and external) such as; regulations, clients and suppliers, advancement in technology, social and economic trends that affects/influence an organization’s operating efficiency and ability to build and maintain successful relationships.

One of the challenges for internal audit is adapting to a dynamic environment and responding to the various challenges presented. Adapting to the changes in business environment will help improve the performance of Internal Audit. Note that; if such changes can be anticipated, the role of internal audit can be structured in such a way to survive, add value and help organizations adapt to the dynamic nature of risk. Therefore, Internal Audit needs to be more effective, forward looking and dynamic.

The collection of techniques, skills, methods, and processes used in the production of goods or services or in the accomplishment of objectives (Technology) is evolving rapidly. Organizations generate and use ever increasing volumes of data that must be scaled by the audit ®THE BUSINESS ENVIRONMENT ®TECHNOLOGY process to deliver a detailed assessment and analysis of the data in the context of risk and control.

It is therefore paramount that internal audit is advancing and adapting to be abreast with the latest innovations, technique or skillset. Internal Audit must therefore embrace and respond to this change to adapt to trend. There is a necessity for internal audit to have the right tools and methodology to ensure a more flexible and progressive technique.

Internal audit has been viewed to be rigid in opinion. Moreover, there is an increasing understanding of the need to attract a wide range of professionals (IT, Statistics, etc.) into the internal audit function to improve capabilities, flexibility and broaden mind-sets. There should be trainings to bridge knowledge gap. Internal audit should therefore adjust to the changing nature, be innovative, future conscious, and insightful to add- value. Banks are highly regulated in Nigeria.

The regulatory terrain has experienced several changes. Internal Audit needs to keep abreast and have a clear understanding of the changing regulations to fulfill its purpose and add value to the Banks. Internal Auditors should ensure that they anticipate, interpret and understand the impact upon the wider risk profile.

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