BrazilNew technologies an opportunity and risk for internal audit
The world of internal audit is being disrupted by developments in technology, with robotic process automation (RPA) and artificial intelligence (AI) at the forefront of these developments.
A new report from KPMG explores how technology is re-shaping the way how organizations can organize and run their internal audit function, as well as how the jobs of staff within the departments is changing.
Conducted by the firm’s Saudi Arabian team, the report also delves into local specifics, finding that while the overall trend of tech disruption is country-agnostic, opportunities and risks show cross-border similarities.
On the opportunity side, robotic process automation can help automate and streamline processes and workflows, with software robots working around the clock and in weekends, as opposed to humans. Software robots can in addition help automate reporting and action planning to stakeholders.
Internal auditors can use artificial intelligence to enhance the way they identify, assess, and prioritize risks by ratings, and subsequently how they evaluate them against likelihood and impact.
The KPMG report also highlights the importance of continuous monitoring and real-time data analysis. With advancements in AI, internal auditors can now step up their game by using data analytics to process larger data files on a faster basis while unlocking pervasive insights on logical trends.
Shadi Abuserryeh, Head of Financial Risk Management at KPMG, said: “Saudi Arabia is witnessing a swift digital transformation, prompting internal audit functions to transition from traditional manual processes to technology-driven approaches. This shift is vital for adapting to the evolving business landscape and regulatory requirements, ensuring robust control environments.”
Curbing the risks
At the same time, the greater use of technology exposes internal auditors (and their organizations) to new risks.
“The use of innovative technologies is undoubtedly effective and efficient, but like any process, it is prone to error. This necessitates constant compliance checks to ensure proper oversight from authorities,” said Abuserryeh.
One of these risks is data privacy, which the report describes as “paramount”, as most organizations today increasingly move towards data driven ways of working. “The rise of data and open data platforms poses significant risks to data privacy, requiring auditors to understand and mitigate these challenges effectively.”
Risks inherent to using AI as a basis for decision-making should also be top of mind for internal auditors. Bias by algorithms – from selection bias to gender prejudice and much more – could surface, meaning it is key for internal auditors to be aware of the models they use and their implications.
“Despite the hurdles, internal audit functions must evolve to keep pace with technological advancements,” stated Abuserryeh. “Business leaders should adopt innovative tools and strategies to mitigate risks and capitalize on opportunities, ensuring that internal audit remains a critical partner in organizational success.”
