5 New Year’s Resolutions for the Year Ahead
Internal Audit 2024
5 New Year’s
Resolutions for
the Year Ahead
Richard Chambers
Senior Internal Audit Advisor
AuditBoard
5 New Year’s Resolutions for the Year Ahead
Looking Back at 2023
Strategic Risks for the Year Ahead
Agenda
5 Resolutions for 2024
Parting Thoughts
5 5 New Year’s Resolutions for the Year Ahead
Five 2023 Lessons for
Internal Auditors
1. Permacrisis persisted
2. AI proliferated
3. Compliance risks materialized
4. Collaboration flourished
5. Culture risks lurked
5 5 New Year’s Resolutions for the Year Ahead
The Most Disruptive Factors
for Internal Audit in 2023
1. Persistent talent shortage
2. Rapid emergence of AI
3. New compliance requirements
4. Macroeconomic turbulence
5. Rapid evolution of non-AI technology
Source: LinkedIn Poll – Jan. 2024 (500+ responses)
5 New Year’s Resolutions for the Year Ahead
Poll Question #1
What was the most “disruptive factor” for your
internal audit function in 2023?
a. Persistent talent shortage
b. Rapid emergence of artificial intelligence
c. New compliance requirements
d. Macroeconomic turbulence
e. Rapid evolution of non-AI technology
f. Other
5 New Year’s Resolutions for the Year Ahead
Internal Audit’s BIGGEST
Challenge in 2024:
Delivering risk-based
audit coverage in the
shadow of a widening
risk exposure gap!
5 New Year’s Resolutions for the Year Ahead
Permacrisis is Fueling the
Risk Exposure Gap
AI
AI
ESG
Inflation
Volume of Risk Demands
Geopolitical
Risk
Exposure
Third-Party
Cyber
Supply
Gap
Pandemic Resource
Chain
Capacity
Time
Strategic Risks for
Internal Audit
5 5 New Year’s Resolutions for the Year Ahead
Strategic Risks in the
Next 5 years
1. Ability to attract and retain talent
2. Inability to identify emerging risks
3. Ability to effectively leverage technology
4. Inability to leverage AI
5. Lack of IT Expertise
6. Ability to identify and address critical risks
7. Stakeholder audit/oversight fatigue
Source: “7 Strategic Risks That Threaten the Future of Internal Auditing.” © 2024 Richard F. Chambers and Associates,
LLC. https://www.richardchambers.com/7-strategic-risks-that-threaten-the-future-of-internal-auditing/
5 New Year’s Resolutions for the Year Ahead
Poll Question #2
What is the most significant strategic risk facing your
internal audit function over the next five years?
a. Ability to attract and retain talent
b. Inability to identify emerging risks
c. Ability to effectively leverage technology
d. Inability to leverage AI
e. Lack of IT expertise
f. Ability to identify and address critical risks
g. Stakeholder audit/oversight fatigue
5 Resolutions for
the Year Ahead
5 New Year’s Resolutions for the Year Ahead
5 Internal Audit
Resolutions for 2024
Redouble Efforts to
Communicate
Impactfully Embrace Complexity
and Ambiguity as an
Cultivate Allies to Opportunity
Secure Internal Audit
Investments
Prioritize
Leverage AI as a Compliance With
Capacity New IIA Standards
Multiplier
5 New Year’s Resolutions for the Year Ahead
1. Redouble Efforts to
Communicate Effectively
Feedback from our stakeholders:
● We only speak when asked.
● Communications aren’t risk-centric.
● We don’t communicate with impact.
● We don’t connect the dots.
● We communicate too much – summarize.
● We don’t offer enough context/insight.
● Communications are too long.
● We read our slides.
5 New Year’s Resolutions for the Year Ahead
Strategies for
Impactful Communication
● Know your audience - What’s important?
● Be clear and concise – Less can be better.
● Contextualize – Not only what, but why.
● Risk-informed – Understand the “So what?”
● Insightful – Connect the dots.
● Watch your tone – “How you say it…”
● Timely – Sometimes better never than late.
5 New Year’s Resolutions for the Year Ahead
2. Cultivate Allies to Support
Internal Audit Technology
Investments
● Ability to leverage technology: A top three strategic
risk for internal audit.
● You can’t leverage what you don’t have.
● Technology costs cited as the big impediment.
● Companies often “trapped in a web of siloed
solutions, legacy tools, budget constraints, and
internal politics.”
● We often need allies/champions – for IT investments.
● Be ready to “work the room” for IT funding.
5 New Year’s Resolutions for the Year Ahead
5 Steps to Persuade
Decision Makers to Invest in
Technology Solutions
Step 1: Identify specific pain points you’re solving for, the
solutions you need, and the premier vendor(s).
Step 2: Identify measurable benefits to justify investments.
Rationalize an ROI.
Step 3: Identify internal stakeholders for support in software
purchase decisions. Who holds the purse strings?
Step 4: Make your case to secure funding. Be persistent and
elevate.
Step 5: Work closely with procurement, IT, and legal.
Step 6: Follow through – demonstrate the investment value.
Source: “5 Steps to Persuade Decision Makers in Your Org to Invest in
Technology Solutions,” © 2023, AuditBoard.
5 New Year’s Resolutions for the Year Ahead
3. Leverage AI as a
Capacity Multiplier
● Inability to leverage AI: Third most-critical strategic risk
● Internal audit lagging in substantial/initial use of generative AI:
○ 4.8%: Risk assessment
○ 5.3%: Development of the plan
○ 5.9%: Engagement planning
○ 6.4%: Fieldwork
○ 3.7%: Engagement reporting
● "Most powerful change agents in our profession are inherently
innovative, deploying innovative solutions to transform internal
audit itself.”
Source: “An AI Powered Call to Action.” © 2023, AuditBoard.
https://www.auditboard.com/blog/an-ai-powered-call-to-action-for-internal-audit/
5 New Year’s Resolutions for the Year Ahead
7 Ways Internal Audit
Can Use AI
1. Risk Assessment and Prediction
2. Continuous Auditing and Monitoring
3. Data Analysis and Mining
4. Predictive Analytics
5. Enhancing Quality and Accuracy
6. Automating Routine Tasks
7. Scenario Analysis and Decision Support
5 New Year’s Resolutions for the Year Ahead
Poll Question #3
In which of these has your internal audit function
made the most progress leveraging AI?
a. Risk assessment
b. Development of the annual internal audit plan
c. Engagement planning
d. Fieldwork
e. Engagement reporting
f. We have used AI in none of the above
5 New Year’s Resolutions for the Year Ahead
4. Embrace Complexity and
Ambiguity as an Opportunity
● Era of permacrisis defined by velocity, volatility,
complexity, and ambiguity
● Complexity: Multiple interconnected parts, factors,
or variables
○ Interconnectedness
○ Dynamism
○ Nonlinearity
○ Diversity and variability
● Ambiguity: Incomplete, contradictory, or unclear
○ Multiple interpretations
○ Uncertainty
○ Vagueness
○ Lack of information
5 New Year’s Resolutions for the Year Ahead
Benefits of Embracing
Complexity and Ambiguity
1. Fosters Innovation and Creativity
2. Enhances Adaptability
3. Improves Problem-Solving Skills
4. Encourages Learning and Growth
5. Builds Resilience
6. Enhances Decision-Making
7. Prepares for the Future
8. Promotes Flexibility
9. Facilitates Deeper Understanding
10. Encourages Collaboration
5 New Year’s Resolutions for the Year Ahead
Poll Question #4
Which of the following reflects the greatest benefit of
embracing complexity and ambiguity?
a. Fosters innovation and creativity
b. Improves problem-solving skills
c. Encourages learning and growth
d. Enhances decision-making
e. Prepares for the future
f. Encourages collaboration
5 New Year’s Resolutions for the Year Ahead
5. Prioritize Conformance
With the New Global
Internal Audit Standards
● New Global Internal Audit Standards
were released on Jan. 9, 2024
● 5 domains
● 15 principles
● 33 standards
● One year to achieve compliance
Source: The Institute of Internal Auditors, Inc. © 2024.
5 New Year’s Resolutions for the Year Ahead
Strategies for Achieving
Compliance with the Global
Internal Audit Standards
1. Review and understand new requirements
2. Undertake a “gap analysis” to ascertain extent of
compliance
3. Identify key actions needed to comply
4. Forge a project plan with milestones and success
measures
5. Brief key stakeholders on new requirements and
actions being taken to achieve conformance
6. Undertake a “readiness assessment” to assess Source: The Institute of Internal Auditors, Inc. © 2024.
conformance as 2025 approaches
Parting Thoughts
5 New Year’s Resolutions for the Year Ahead
The 2024 Resolutions are
a Product of the Era
● Permacrisis is generating volatility, uncertainty, and a widening
risk exposure gap.
● Every year brings new disruption for the profession and
organizations we serve.
● We face an abundance of lingering and emerging strategic risks.
● In 2024, we must focus on:
○ Redoubling efforts to communicate impactfully
○ Cultivating allies to secure internal audit investments
○ Leveraging AI as a capacity multiplier
○ Embracing complexity and ambiguity as an opportunity
○ Prioritizing compliance with new IIA standards
Questions & Answers
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