Tuesday, August 25, 2020

What does innovation mean to Internal Audit?


The pressure is mounting on Internal Audit to become innovative and this is understandable and expected. The call for innovation is not new but has certainly intensified during the COVID 19 pandemic as organizations are going through changes and transformation to adapt to the new normals. Innovation may mean different things to different people, in this post I will discuss what innovation means to internal audit.

What is innovation?

In traditional dictionaries, innovation is defined as developing a new idea, method, service, or product. In reality, it is more than that. It also refers to updating current processes to improve the quality of services and products. It does not mean that you always start from scratch!

What is innovation in internal audit?

There may not be a unified definition of what innovation in internal audit means. For some it could mean reinventing internal audit, for others, it means one or more of the following:
  • transformation to agile internal auditing
  • better leveraging of technology and greater use of data analytics, RPA, and AI
  • exploring and accepting new ideas and alternative processes to improve audits
  • empowering the creativity of internal auditors and encouraging brainstorming
  • better utilization of available resources
  • understanding how the organization is changing its business model and operations and adjusting audit plans and procedures accordingly
  • more access to specialized skills internally and externally
  • enhanced reporting and real-time communication
  • more investment in relevant training
  • risk anticipation and enhanced risk assessment
  • change of internal audit mindset and culture
  • striking the right balance between consulting and assurance services
What else do you consider as an innovation in internal audit?
Please share what innovation means to you. I would love to update the above-mentioned list with your definition and understanding of innovation in internal audit.

How to become innovative?

The first step is to clearly define innovation and ensure that your stakeholders agree with it. Then develop your objectives and start working on your mindset and the mindset of your team. Don't be afraid to think loudly even if what you are thinking about sounds crazy and illusional! Put some of these crazy ideas to test and see what happens!  I like the advice offered by a  themuse article on how successful people become more innovative. It lists the following characteristics.
  • they don't discount their crazy ideas
  • they get comfortable with fear
  • they learn about anything and everything
  • they never think they know it all
  • they surround themselves with heroes

Please share what innovation means to you and what have you done in practice to become innovative.

These are my thoughts, please share yours.

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