The document outlines strategies for positioning internal audit functions for future challenges, emphasizing the need for auditors to adapt to a changing risk landscape and to communicate effectively with stakeholders. It suggests reevaluating team attributes, competencies, and processes to align with the expectations of the future auditors who should be innovative, data-driven, and valuable to business strategies. Additionally, the importance of leveraging technology and fostering a culture of continuous improvement is highlighted to enhance audit impact and stakeholder perceptions.

1. POSITIONING INTERNAL AUDIT
FOR THE FUTURE

2. SETTING EXPECTATIONS
• Plant seeds that will provoke your thinking over time
• Encourage you to think a little differently about something
• Take away at least one new idea

3. WHAT DOES AN INTERNAL AUDITOR DO?
What other departments think we do
What we really do
What our parents think we do
What we think we do
What society thinks we do
What Audit Committees think we do

4. STAKEHOLDER PERCEPTIONS
Source: PwC 2013 State of the internal audit profession study
1,700 executives participates in the 9th annual PwC State of the Internal Audit
Profession Study - there are clear alignment and expectation gaps

5. STAKEHOLDER PERCEPTIONS
Source: PwC 2013 State of the internal audit profession study
The majority of Board Members think IA contributes significant value despite how
they perceive IA is performing in key areas

6. STAKEHOLDER COMMENTS
• ‘Auditors are very predictable. They do the same things over and over,
year after year. They focus on the usual and stay away from the
unusual.’
• ‘Audit reports seem to emphasize a keen sense of the obvious and miss
the really big things.’
• ‘I wish our auditors would focus on being better communicators.
When they speak or write, people tend to tune out.’
• ‘The most frustrating thing is when the auditors make big conclusions
on small samples – there is no basis for that!’
• ‘My auditors give me lots of information but very little insight.’
Perception of hindsight versus foresight

7. CHANGING RISK ENVIRONMENT
The world is constantly changing –
new risks are always emerging:
• Economic pressures, challenges
• Extreme weather
• Population growth, aging
• Political instability
Risks are continuously evolving:
• More dynamic, agile businesses
• Regulatory changes, more
enforcement
• Talent that can drive, navigate
competitive advantage
• Fraud, waste and abuse
Hard to keep up with the speed of
growth, change, use of technology:
• Cyber threats
• Privacy issues
• Social media. reputation impact
• Big Data

8. MANAGING RISK
Source: IIA Pulse of the Profession - Defining Our Role in a Changing Landscape Report

9. FUTURE AUDIT POTENTIAL
Source: PwC 2013 State of the internal audit profession study

10. FUTURE AUDIT POTENTIAL
• Consider creating or updating a ‘Vision’ and ‘Mission’ for
Internal Audit – clearly articulate your ‘Value Proposition:
• What does it include?
• What does it exclude?
• What has changed?
• Where are you now?
• How will you get there?
• How long will it take?

11. THE FUTURE AUDITOR
• Is PASSIONATE about what they do
• Has a clear value proposition that is ALIGNED with all
stakeholders
• Focuses on what REALLY MATTERS
• Has EXPERTISE that is VALUED
• Influences business STRATEGIES and LEADERS
Provides stakeholders with meaningful insights

12. ATTRIBUTES OF FUTURE AUDITOR
• Is intellectually curious
• Speaks the language of the business
• Continually works to cultivate, nurture strong relationships
• Inspires others
• Can identify, understand emerging risks, business issues
• Thinks creatively and is highly innovative
• Understands technology and its role in the business
• Is a data guru
Nature vs. Nurture

13. POSITIONING FOR FUTURE - PEOPLE
• Assess your team attributes against the attributes of the
Future Auditor to prioritize your opportunities for
improving the composition of you team:
Cookie cutter audit teams are not the way to go

14. POSITIONING FOR FUTURE - PEOPLE
• Re-evaluate your team competency models
• Align feedback processes to promote growth in key areas
• Assess the adequacy of your investment in the right
training and development for your team
• Establish reward/reinforcement strategies to recognize
demonstration of or improvement in critical skills
• Create opportunities to step outside of comfort zones
• Consider hiring people that are not auditors
Consider WIN-WIN transition strategies if necessary

15. POSITIONING FOR FUTURE - PROCESS
• Re-evaluate how your team assesses risk – consider:
• Is it holistic, timely and meaningful?
• Is their true collaboration with other functions to ensure an
integrated view of risk?
• Would your process identify an emerging internal or
external risk?
• Re-evaluate the impact of your work:
• Is it focused on things that really matter to the business?
• Does it tell people something that they didn’t know?
• Does it drive real business results?

16. POSITIONING FOR FUTURE - PROCESS
• Constantly review and improve methodologies, programs
and tools to ensure that you are maximizing efficiency:
• Where are the bottlenecks?
• Manual work be automated – ‘routines’ for ‘routine’?
• Doing things that people don’t pay attention to or care
about?
• Is there anything that is no longer relevant?
• Do you look back at what you’ve done find improvement
opportunities that changes the way you work?

17. POSITIONING FOR FUTURE - TECH
Foundational capabilities to deliver value
Solid understanding of the technologies
of the business drives audit strategy
Maximum leverage of continuous
monitoring
Deep data analysis and analytical
capabilities

18. POSITIONING FOR FUTURE - TECH
• Strategic use of technology can be a BIG lever for improving
stakeholder perceptions and shift the team’s focus of
hindsight to insight and eventually foresight….
• USE continuous monitoring, data analysis in risk assessment
• Be CREATIVE about how you approach data analysis - deliver
WOW factor
• Beware of the ‘OVERWHELMING’ TRAP – data is NOT insight
• SHARE your tools with the business to collaborate and learn
Set REALISTIC goals for the team to ensure SUCCESS

19. IA TEAM OF THE FUTURE
• Focus on maximizing the IMPACT of your contribution to
the business
• INVEST in the PEOPLE and TOOLS necessary for success
• Create and nurture a CULTURE of innovation and quality
improvement
• Cultivate the SOFT skills to build great relationships
Focus on INSIGHT and FORESIGHT not hindsight

20. POSITIONING INTERNAL AUDIT
FOR THE FUTURE
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