Protiviti Report Looks Back at 20 Years of Transformation in Internal Auditing

The willingness of the internal audit function to be bold and adopt an innovative mindset has transformed the industry

MENLO PARK, Calif. – July 30, 2024 – The internal audit function has evolved significantly over the last two decades, according to the 20th anniversary edition of the global consulting firm Protiviti’s Internal Auditing Around the World^® report. The milestone report, “Exploring a Universe of Experience as a Launchpad to the Future,” analyses how internal audit has transformed over the past 20 years and provides strategic considerations to launch internal audit teams forward.

To undertake a technology-driven review of previous reports, the 20th edition utilised Protiviti’s proprietary generative AI tool to review the past 19 volumes of the series to identify themes and trends. The series collectively contains 244 profiles of leading internal audit functions and more than 460,000 words of commentary and insights.

“Internal audit leaders must be bold, willing to explore and expand into new frontiers — serving as a guiding star, steering organisations toward a resilient and adaptive future,” said Andrew Struthers-Kennedy, global leader of Protiviti’s Internal Audit and Financial Advisory practice.

The report revealed several trends underscoring the transformation of internal audit functions:

• Rise to relevance as strategic adviser: The internal audit function and the role of Chief Audit Executives (CAE) have evolved from a compliance-focused, backward-looking function to a strategically aligned and value-adding partner to the organisation.
• Value delivery: The shift from a compliance and controls focus to a wide-ranging mix of assurance and advisory services over the 20 years has played a major role in shaping the view of the internal audit as a function delivering value and providing sought-after strategic input.
• Board engagement: Boards have come to rely more on their internal audit leaders to focus and advise on high-risk areas beyond compliance activity such as: cybersecurity, fraud, new technology adoption, market expansion, sustainability initiatives and more.
• Technology and data enablement: Technology, particularly data analytics, automation and, most recently, AI, have become integral in modernising the internal audit function.
• Diversity of talent: Leading internal audit functions have invested in attracting, developing, and retaining talent with diverse backgrounds and capabilities and have made talent management a core part of their function’s strategy.  Soft skills (such as effective communication, critical and creative thinking, and problem solving) are emphasised just as much as more technical skills (such as knowledge and ability to use analytics solutions and emerging technologies).
• Catalyst for change: Finally, best-in-class internal audit functions  act as catalysts for change. These teams provide insights that drive improvement and help their organisations capture opportunity while safeguarding against downside risks.

This year’s report outlined five strategies that CAEs and internal audit teams should take to elevate their functions, which include prioritising transformation, leaning on technology, cultivating talent, adopting an innovation mindset and acting as a strategic partner through collaboration and communication. The report points out that these actions will help CAEs and their teams continue to be strategic, highly relevant, value- and opportunity-oriented, risk-centric, and technology-enabled advisers.

Resources Available

The report, “Exploring a Universe of Experience as a Launchpad to the Future,” and the ‘Notable Internal Audit Milestones’ one-pager are available here