Nearly a quarter of internal audit teams intend to implement cloud-based audit management or governance, risk and compliance software this year, according to a new survey.
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The findings come as more auditors implement cloud-based technology, especially during the pandemic when many organizations have shifted much of their workforce to remote work from home arrangements. Hesitancy over adoption of cloud technology is giving way to practical necessity.
“While automation of administrative functions offers clear and immediate benefits, internal audit is discovering the technology’s potential to drive departmental and business value,” said IIA COO William Michalisin in a statement last month. “This survey shows a positive step forward, with 22 percent of respondents saying they plan to implement cloud-based technology this year. As this report suggests, technology doesn’t merely complement the internal audit function, it’s crucial to more effective practices, allowing us to focus where it matters most and to elevate our value to stakeholders.”
Plans for greater use of cloud technology indicates that internal audit departments are moving nearer to the cloud technology adoption rates of other business functions like the IT department. Internal auditors cited a number of challenges they encountered last year. A 52 percent majority of the respondents said identifying and evaluating new and emerging risks was their top challenge in 2020, while 43 percent cited the need to collaborate remotely with internal and external audit stakeholders. Communication and follow-up with business owners was considered a top concern by 38 percent of the internal auditors who responded to the survey.
The top uses for audit management software cited by the survey respondents were document management, issue and action plan management, and testing and work reviews. One respondent indicated that internal auditors have more time for strategic activities when their administrative activities are automated.
“Many internal audit teams that have not yet shifted to a cloud approach are now set to reap the benefits of modernization — including gaining greater bandwidth for strategic, value-add activities — and will be better positioned to protect their organizations from new and emerging risks,” said AuditBoard chief marketing officer John Reese in a statement. “They'll also get to equal footing with other functions within their organization who have already made the move to cloud-based solutions.”
The report points to some of the advantages of cloud-based solutions compared to other technologies in that they are often more secure than manual solutions and are easier to implement and administer than on-premise systems. Cloud-based systems are typically offered as a service, reducing the cost of maintenance and offering increasing value over time, as new features and improvements are added to benefit older and newer customers. Cloud-based investments are considered operational expenses, which are often favored by CFOs and may have a streamlined purchase process compared to on-premise investments, which are considered capital expenses, often subject to extra scrutiny. When choosing which approach to take, chief audit executives should familiarize themselves with the organization’s operational expense and capital expense approval processes, the report advises.
Separately, former IIA president and CEO Richard Chambers, who recently left the IIA after running the organization for 12 years, has joined the board of SWAP Internal Audit Services, a company in the U.K., as its first independent non-executive director, starting April 1. He also recently formed his own firm, Richard F. Chambers and Associates LLC, with the mission of informing and inspiring internal auditors and illuminating the potential of the profession globally.
