2018 IIA Conference: Top 9 Essential Emerging Technologies for Internal Audit
October 31, 2018
The Baltimore Chapter of the Institute of Internal Auditors (IIA), hosted the annual Mid-Atlantic District Conference with key presentations and sessions focused on “keeping your edge” in the competitive and evolving field of internal audit. This theme focused on future trends within the internal audit industry, and included seminars on how auditors can continue to keep their edge by reinforcing positive traits.
To deliver this message, the IIA enlisted the help of speakers from a wide range of professional backgrounds like Baltimore Ravens sports broadcaster and author Gerry Sandusky, international motivational speaker and author Dr. Kevin Snyder, and US Secret Service Special Agent Brian Bonus. The range of topics was just as diverse as the conference’s speakers. One of the highlights of the 18 engaging sessions was the essential emerging technologies in internal audit that effectively reinforced the “Keeping Your Edge” theme.
9 Essential Emerging Technologies
The session on emerging technologies focused on increasing an auditor’s ability to talk intelligently to stakeholders about new technologies many organizations are adopting and how they can be included in future audit reviews.
- 3D Printing: This tool can be used to develop prototypes without incurring the expenses typically associated with custom fabrication. 3D printing has the capability of impacting the audit process as audit scopes could increase due to internal production of manufacturing components that were once outsourced.
- Artificial Intelligence (AI): Always a widely discussed topic, AI increases the efficiency of problem solving in an internal audit team. Organizations are looking to AI for forecasting future scenarios and predicting likely outcomes. It has the potential to reduce the effort of review by the auditor as more processes rely on this technology for automation.
- Augmented Reality (AR): Organizations could integrate the use of AR when a specific level of interaction cannot be experienced with the physical object alone. This may increase and improve training requirements in certain fields like the medical community. If implemented, auditors should be aware of the implementation of the new associated requirements.
- Blockchain: This technology has been implemented and gained a lot of attention for cryptocurrency and payments. However, blockchain could also be recommended by internal audit for use in supply chain strategies, digital identification, and distributed ledger technology. This may allow auditors to streamline the audit process through software that continuously audits organizations using its sophisticated technology.
- Drones: Possible implementation of this technology includes access to, and the monitoring of, locations that are dangerous or inaccessible to humans. Drones also offer cost savings compared to manned aerial, ground, or nautical vehicles. As new regulations are enacted to provide oversight of drone activity, it will be important for Audit to remain aware of new requirements to ensure organizational compliance.
- Internet of Things (IoT): Implementation of this expanding technology should be considered for continuous monitoring of remote assets and the creation of alerts and actions through communication with other IoT devices, such as proactively alerting managers about prevention schedules, readings, or equipment failure, and connecting stockrooms to track orders, incoming shipments, and to warn of low stock. With the amount of data collection required for IoT operations, auditors may have to increase their scope to include data collected, stored, and transferred securely through IoT.
- Robotic Process Automation (RPA): Implementation strategies should be considered for recurring tasks such as running a daily query report out of a system, or the calculation and maintenance of records and transactions. RPA will allow audit to expand coverage of testing while increasing productivity by automating tasks that don’t require human interaction.
- Robotics: Internal audit may recommend the use of this technology within industries that could automate, augment, and/or assist human activities. Similar to drones, audit can leverage robotics in areas that are dangerous or inaccessible to humans.
- Virtual Reality (VR): VR can also simulate dangerous environments to provide risk-free training prior to user exposure to the physical environment. Like Augmented Reality, VR can be used by organizations as a training tool, which may even become a requirement in the not too distant future. Internal Audit should be aware of any changes within their organization on required training for employees.
Driving Forces for Technology Change
These technologies are being advanced by lower technology costs and the tremendous speed at which improvements are occurring. As prices continue to drop and new technologies become available, organizations can afford to invest and adopt without creating a financial burden.
The rate of technology adoption in the US has seen tremendous growth year over year. From designing to actual production, the turnaround time to make new technologies available to businesses and consumers continues to shorten. Once production begins, the rate at which the US market adopts these new technologies increases. For instance, it took 56 years for half of the US to own a telephone, but it took only seven years for the cellular telephone to reach half of US households.
Technology develops and moves into production at a record pace, and organizations are adopting new technologies earlier in an effort to gain a competitive advantage. Part of the responsibility of an effective internal audit function is to ensure management is aware of emerging trends, and to help guarantee processes remain efficient and internal controls continue to address risk in a quickly changing environment.
The 2018 IIA Mid Atlantic District Conference included informational sessions that provided important information and strategies. The sessions reminded attendees of the importance of continuously monitoring the changing technology landscape and ensuring internal audit remains focused on identifying and addressing new and changing risks as organizations continue to drive forward towards growth and success in an ever-changing landscape.