Navigating the evolution of a crucial profession

By Dickson Agaba

May was the internal audit month, a time when we celebrate a profession that is still working its way to recognition on the executive round table.

During this month, internal auditors around the world take the opportunity to raise awareness of the crucial role the internal audit profession plays in businesses, as well as to recognise and honor invisible heroes of the profession.

In the ever-changing landscape of the corporate world, the role of the internal auditor has seen a significant transformation.

Historically, internal auditors were often seen as the organization’s watchdogs, focused primarily on ensuring compliance with established policies and procedures.

When I started in this role 17 years ago, you had to strike a mean pause, hold a green pen, sit in a small corner of the building, and have minimal interaction with colleagues. The bulk of the interactions with colleagues happened when discussing findings and, in most cases, these ended with misguided views about our profession.

When the audit ended, you went back to your corner and kept a low profile, all with the misconception that interactions with colleagues outside scheduled audit activity could impair your independence.

Getting into the future, the auditor who creates the most value is visible within the organization, knows the organization’s strategy, can identify current and emerging risks, and brings it all together into his assurance or advisory plan.

The future of internal auditing promises a more dynamic and strategic role, integral to the success and sustainability of modern enterprises. This transformation is being driven by rapid technological advancements, changing regulatory environments, and the increasing complexity of risks facing organizations.

I have learned that independence both actual and perceived can still be managed with the future model.

However Internal auditors need to be highly self-aware and vigilant about maintaining their objectivity and ethical standards, equally senior management must exhibit maturity by respecting the auditor’s role and understanding the importance of not overstepping boundaries that could compromise the auditor’s independence.

The traditional internal auditor
Traditional internal auditors primarily focus on compliance and financial accuracy. Their responsibilities often include verifying financial statements, ensuring adherence to regulatory requirements, and conducting routine audits of internal processes. Their work is largely retrospective, looking back over records and activities to identify discrepancies or areas of non- compliance.

In the past, internal auditors relied heavily on manual processes and basic tools such as spreadsheets and accounting software. This traditional role emphasized meticulous record- keeping, regular auditing cycles, and a focus on identifying discrepancies and preventing fraud.

Their skill sets were predominantly centered around financial acumen, attention to detail, and a thorough understanding of regulatory standards.

The future internal auditor

The future internal auditor’s role is expanding beyond compliance and financial accuracy to encompass a broader, more strategic perspective. They are increasingly involved in risk management, strategic advisory, and operational efficiency. This shift reflects a growing recognition of the need for internal auditors to provide value-added services that contribute to the overall success and resilience of the organization.

As technology reshapes the business environment, future internal auditors must be proficient in advanced data analytics, cybersecurity, and emerging technologies such as artificial intelligence and blockchain.

The approach of the future internal auditor is more dynamic and proactive. Rather than simply identifying issues after the fact, they are increasingly engaged in continuous auditing and real- time monitoring. This allows them to anticipate and mitigate risks before they materialize.

Embracing this future requires a commitment to ongoing education, technological proficiency, and a proactive, forward-thinking approach to risk management and governance.

The new global internal audit standards taking effect in January 2025 are pushing a similar agenda. The standards state that Internal auditing strengthens the organization’s ability to create, protect, and sustain value by providing the board and management with independent, risk-based, and objective assurance, advice, insight, and foresight.

As we celebrate the profession, lets embrace the future ensure that we ready for change.

Dickson Agaba is the  Chief Internal Auditor, Absa Bank Uganda Limited