Risk factor plays part in internal audit and transformation
Internal audit can play a key role in major organizational transformation programmes, according to a new report.
The report, Organizational Transformation: What is Internal Audit’s role?, by PricewaterhouseCoopers, states that internal audit should encompass the end-to-end lifecycle of such programmes and embed a risk-driven assurance approach. It says that the earlier an internal audit addresses the programme’s proposed risk management strategy, the better.
‘Most large-scale programmes will have a quality plan and a risk management strategy, typically generated in the early stages of the programme,’ said the report. It also found that there is greater demand for accountability and transparency in organizations involved in such programmes, which are expected to deliver benefits to many different stakeholders without compromising the integrity of the existing business or violating compliance requirements.
The report goes on to show that internal audit’s involvement at this early stage ensures greater alignment of the risk management principles to those of the organization itself. This allows internal audit to establish and confirm its future involvement and method of engagement based on the level of inherent risk in the transformation.
The importance of strong reporting practices was also underlined: ‘Many programmes are running at high speed and in a high-pressure environment. Timely and practical reporting is important. It’s critical that the programme is able to address any issues identified, and timely reporting is a key element in this.’