PwC’s Digital Services
In een disruptieve organisatie
De Internal Audit Functie
PwC Digital Services PwC’s Digital Services
What is disruption?
How to create significant value?
The impact of emerging technologies on Internal Audit
Actions to take today
2
Disruptie = Opschudden
3
Disruptie = Innoveren
4
Disruptie = Agressief marketen
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PwC Digital Services
Well respected companies who went through difficult times
Who will be next?
6
PwC Digital Services
Disruption start-up’s
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Shaking up existing markets with new products and services, with innovative business models, with aggressive marketing strategies, and fresh
management approaches
>≠∞
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What do we need to do to not become a Free Record Shop?
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What do we need to do to not become a Free Record Shop?
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Assurance provider
Assurance provider
Assurance provider
Assurance provider Problem
Solver
Problem Solver
Problem Solver Insight
generator
Insight generator
Trusted advisor Unrealized value
Align expectations Build capabilities
Deliver quality
Increase value
Position
Vision
Talent
Business Alignment Communication
Business
understanding
Manage change Strategic plan
Collaborate Proactive
Adding value Mandate
Unwavering Strategic thinker Courage
Stakeholder expectation
Trust
Relationships
Integrity Negotiate
Team building
Sourcing
Talent development MentorFlexible
Executive presence
Respect Listen
Confident
Conviction Interpersonal skills
Business knowledge
Business acumen Influence
Passion
Motivate
What do we need to do to not become a Free Record Shop?
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PwC | IIA Congres
18%
of the respondents to 2017’s PwC survey report that their internal audit function plays a valuable role in helping their companies anticipate and respond to disruptive events.
We call these Agile IA functions.
Agile = Prepared + Adaptive
88%
of stakeholders with Agile IA Functions report Internal Audit is contributing significant value compared to 41% of stakeholders with less agile Internal Audit functions
What do we need to do to not become a Free Record Shop?
12
Internal audit functions most advanced in their technology journey are:
Evolving their technology and talent model in
lockstep
Fusing these
capabilities to create internal audit functions where technology-enabled
talent is the norm
Contributing greater value to the
organization than those with less of a
technology focus
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The impact of emerging technologies on Internal Audit
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A few examples of emerging technologies
RPA
Blockchain
Machine Learning Predictive Analytics
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PwC Digital Services
What boards want
• Have a perspective on the risks that new technologies bring
• Provide advice on new technologies
What internal audit should have
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• Emerging technology skill sets
• New audit approaches
• Using innovative technologies
PwC Digital Services
Failing to improve Internal Audit’s technology adoption
will diminish its value to their organization
(56% agrees)
STATE OF THE INTERNAL AUDIT PROFFESSION PWC
“
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PwC Digital Services
Robotics
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0% 10% 20% 30% 40% 50%
Plan to use within 5 years Plan to use within 2 years Use now
NL Global
PwC Digital Services
Artificial Intelligence
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0% 10% 20% 30% 40% 50%
Plan to use within 5 years Plan to use within 2 years Use now
NL Global
PwC | IIA Congres
75%
54%
34%
OBSERVERS FOLLOWERS EVOLVERS
More innovative in technology, better
aligned with stakeholder Rated as
more valuable
Capacity to expand risk
coverage
83%
71% 23%
OBSERVERS FOLLOWERS EVOLVERS
Global The Netherlands 20
Organisations who view the IAF as providing significant value
What does this mean for Internal Audit?
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PwC | IIA Congres
New areas
Lesson 1
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Emerging technologies
impact Internal Audit
PwC | IIA Congres
New areas Roles and
outputs are dynamic
Moving
(organizational) boundaries
Dependency of third parties
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Lesson 1
PwC | IIA Congres
Changing lines of defences
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Responsible and leading the way!
1. 2. 3.
Enable and Evolve
Review and Be prepared
Support and assist the first and second line
Bring queries, algorithms and dashboards to first and second line
Incubate new governance
functions to be moved to second line
Keep the board and the AC aligned
Lesson 2
PwC | IIA Congres
Tomorrow’s
Internal Auditor
Enabler:
Generic Internal Auditor
To:
IT skilled Auditor
From:
IT-Auditor To:
Subject Matter Expert with deep knowledge
Lesson 3
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PwC | IIA Congres
Tomorrow’s
Internal Auditor
More flexible
delivery models Reimagine the composition of the
department
Select and attract technology-enabled
talent
Lesson 3
26
PwC | IIA Congres
What does this mean for Internal Audit?
Opportunity for new IA enablers
Risk Assessment:
Intelligent and dynamic risk assessments, using big data and IoT.
More frequent or continuous risk assessments.
Planning:
From annual planning to roll-forward to continuous (re-) planning
Leading to (short term) less flexibility as data is needed to prepare
Fieldwork
Better preparation leads to more focused, less extensive fieldwork
Type of audit evidence (incl. gathering) will change
Lesson 4
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Reporting
Report will become less important; data library will be an asset auditees would like to have
Interactive reporting using virtual reality
Continuous auditing
Data analytics and AI coupled with data lakes provide
opportunities for continuous auditing
PwC Digital Services
Soft Controls!
28
Have to want it
Be able
Be allowed
Action to take today!
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30
Lack of necessary skills
Not a priority investment for Internal Audit
Inadequate
tools and
technology
capabilities
Shake up your Internal Audit function with new products and services, with innovative talent models, with aggressive
marketing strategies, and fresh management
approaches
>≠∞
31
PwC | IIA Congres
Evolvers – Successfully fusing technology & talent
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Evolver Traits Use advanced
technology collaboration tools and rate well in cost optimization
Invest
specifically on technology training
90% 73%
Technology Talent
Utilize analytic and monitoring tools
Have correct mix of technology, operational and financial skills
82% 72%
Experiment with predictive risk indicators
Have team members with advanced
technology skills
28% 66%
Assess where Internal Audit stands with its tech-enabled foundation
Fuse technology and talent into a single strategy
Innovate and be revolutionary whenever possible
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PwC Digital Services
Thank you!
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