Internal Audit, Risk, Business & Technology Consulting

Protiviti Perspective provided by Nikhil K., New Delhi

NEXT GENERATION IA – IN PURSUIT OF INNOVATION

© 2019 Protiviti – Confidential. An Equal Opportunity Employer M/F/Disability/Veterans. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services. All registered trademarks are the property of their respective owners.

INTRODUCTIONS

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Managing Director, Protiviti Internal Audit - Technology

Andrew Struthers-Kennedy

Senior Manager, ProtivitiInternal Audit

Jared Bourcier

Image Image

© 2019 Protiviti – Confidential. An Equal Opportunity Employer M/F/Disability/Veterans. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services. All registered trademarks are the property of their respective owners.

SESSION TOPICS

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Innovation in Internal Audit – Why & How?

Components of Next Gen

Emerging Technologies and Approaches

© 2019 Protiviti – Confidential. An Equal Opportunity Employer M/F/Disability/Veterans. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services. All registered trademarks are the property of their respective owners.

THE CHALLENGE…

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Is IA using enterprise data efficiently to conduct risk assessments and continuous monitoring?

Has IA added resources and skill sets to address increased expectations from stakeholders?

Has IA started to increase use of technology to enhance the internal audit function?

Is IA still performing (and reporting) audits and reviews in the same way as in years past?

Is IA positioned to respond to changing key business risks associated with digital transformation initiatives?

© 2019 Protiviti – Confidential. An Equal Opportunity Employer M/F/Disability/Veterans. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services. All registered trademarks are the property of their respective owners.

ESSENTIAL OBJECTIONS OF NEXT GEN IA

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A range of innovative approaches, tools and governance enablers, including a culture of innovation to…

Improve assurance by increasing the focus on key risks… in time1

Make internal audit more efficient2

Provide deeper and more valuable insights3

© 2019 Protiviti – Confidential. An Equal Opportunity Employer M/F/Disability/Veterans. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services. All registered trademarks are the property of their respective owners.

NEXT GENERATION INTERNAL AUDITCompetencies, qualities and components to effect change

Next Generation

Internal Audit

IA Strategic Vision

Resource & Talent Management

Aligned AssuranceAdvanced Analytics

Process Mining

Machine Learning (ML) Artificial Intelligence (AI)

Continuous Auditing Dynamic Risk Assessment

High Impact Reporting Agile Audit Approach

Robotic Process Automation (RPA)

Organizational StructureNext-

Generation Internal Audit

AUTOMATION IN AUDIT

© 2019 Protiviti – Confidential. An Equal Opportunity Employer M/F/Disability/Veterans. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services. All registered trademarks are the property of their respective owners.

AUTOMATE EVERYTHING?

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• Brainstorm candidates• Evaluate for technical feasibility and business value• Prioritize automation opportunities• Evaluate through POC… prove what’s possible• Scale

Follow a disciplined approach to automation…

© 2019 Protiviti – Confidential. An Equal Opportunity Employer M/F/Disability/Veterans. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services. All registered trademarks are the property of their respective owners.

PURSUING RPA… HOW TO STARTOpportunityAssessment

InitiateProgram

Pilot Deployment

Proof of Concept

Deploy, Operate & Monitor

Roadmap

Identify automation candidates and completing a Proof of Concept…

© 2019 Protiviti – Confidential. An Equal Opportunity Employer M/F/Disability/Veterans. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services. All registered trademarks are the property of their respective owners.10

USE CASES FOR INTERNAL AUDIT

Testing Artifact Gathering

Admin / PMO / eGRCControl Activities

© 2019 Protiviti – Confidential. An Equal Opportunity Employer M/F/Disability/Veterans. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services. All registered trademarks are the property of their respective owners.

RPA IN ACTION…

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RPA In Action

AGILE FOR INTERNAL AUDIT

© 2019 Protiviti – Confidential. An Equal Opportunity Employer M/F/Disability/Veterans. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services. All registered trademarks are the property of their respective owners.

AGILE AUDIT… WHAT AND WHY?

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Product Backlog

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B

C

F

Sprint Backlog

D.1

D.2

D.3

D.4

Sprint Planning

Daily Scrum

SprintSprint

Deliverable

E.1

E.2

Sprint Review&

Retrospective

IA DeliverableD.5

Product and Sprint Backlogs (Risk Aresa) Drive Work

Real Time Deliverables and Feedback

Iterative and Incremental Fieldwork / Testing

Plan Work Review

© 2019 Protiviti – Confidential. An Equal Opportunity Employer M/F/Disability/Veterans. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services. All registered trademarks are the property of their respective owners.

AGILE AUDIT… WHAT AND WHY?

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Source: Protiviti 2019 Internal Audit Capabilities and Needs Survey

© 2019 Protiviti – Confidential. An Equal Opportunity Employer M/F/Disability/Veterans. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services. All registered trademarks are the property of their respective owners.

AGILE FOR AUDIT?

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• Our POV… focus on delivering quality product faster and more efficiently, with improved stakeholder engagement

• Instill an agile mindset and empower personnel to innovate and find way to do things better

Broad Range of Definitions for Agile in IA…

© 2019 Protiviti – Confidential. An Equal Opportunity Employer M/F/Disability/Veterans. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services. All registered trademarks are the property of their respective owners.

EXAMPLES OF AGILE IA

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Focus on Benefits vs. Strict AdoptionMore focused “sprint-like” delivery of

audits – shortening time-to-report

An iterative “follow-the-risk” type approach to audit delivery

Iterative, high-touch, and flexible reporting process

Integrated (cross-functional) teams formed into “pods” delivering a series

of audits (backlog)Increased involvement of IA and

business leadership (standup and sprint review meetings)

Audits broken down into sprints with focus of delivery of results and direct

feed into reporting

Emphasis on data gathering in advance of project

PROCESS MINING

© 2019 Protiviti – Confidential. An Equal Opportunity Employer M/F/Disability/Veterans. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services. All registered trademarks are the property of their respective owners.

PROCESS MINING FOR AUDIT INSIGHT

© 2019 Protiviti – Confidential. An Equal Opportunity Employer M/F/Disability/Veterans. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services. All registered trademarks are the property of their respective owners.

PROCESS MINING DEMO

Uses data from enterprise systems to visually reconstruct how processes actually perform… what is actually happening, creating a

complete process map

INTERNAL AUDIT TOOLKIT

© 2019 Protiviti – Confidential. An Equal Opportunity Employer M/F/Disability/Veterans. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services. All registered trademarks are the property of their respective owners.

THE IA TOOLKIT

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© 2019 Protiviti – Confidential. An Equal Opportunity Employer M/F/Disability/Veterans. Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services. All registered trademarks are the property of their respective owners.

THOUGHT LEADERSHIP

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Q&A