Navigating Change with Confidence: Embracing a Dynamic Approach to Internal Audit.

In today's business world, change isn't just constant; it's accelerating. New technologies emerge, markets shift, customer expectations evolve, and global events can rapidly introduce unforeseen risks. For senior managers, staying ahead requires agility, foresight, and the ability to adapt quickly. Your internal audit function needs to be just as dynamic to provide truly valuable assurance in this fast-moving environment.  

Moving beyond a traditional, static approach, a "dynamic" internal audit is one that is agile, forward-looking, and deeply responsive to the pulse of your business. It doesn't just execute a fixed annual plan; it actively senses risk, adapts its focus, and provides timely insights on the issues that matter right now and in the future.  A Dynamic Internal Audit

What does this look like in practice?

Firstly, it involves flexible audit planning. While an annual plan provides structure, a dynamic function is ready to adjust priorities as new risks emerge or business strategies pivot. If a sudden disruption impacts your supply chain, a dynamic internal audit team can quickly assess the relevant controls and risks in that area, rather than waiting for a pre-scheduled audit cycle.  

Secondly, it incorporates continuous risk sensing. This means internal audit is constantly scanning the internal and external environment – engaging with business leaders, monitoring industry trends, and staying informed about regulatory changes or technological advancements. They are listening for signals of emerging risks, whether it's the increasing threat of cybersecurity breaches targeting operational systems, the growing importance of

Environmental, Social, and Governance (ESG) performance and reporting, or the potential impacts of new competitor strategies.  

This constant awareness allows internal audit to stay relevant. They can focus their efforts on the areas of highest risk and strategic importance today, rather than potentially spending valuable time on less critical areas because they were planned months ago. This ensures their work is always aligned with the business's most pressing concerns. Crucially, a dynamic internal audit function thrives on open and ongoing dialogue with the business. They don't just appear periodically to perform an audit; they build relationships, attending relevant business meetings and maintaining continuous communication with management across different departments. This allows them to truly understand strategic priorities, anticipate changes, and identify where their expertise can provide the most value.  

This close partnership enables internal audit to provide timely insights on new initiatives and projects. Are you launching a new e-commerce platform? Implementing a significant operational technology system? Entering a new geographical market? A dynamic internal audit team can engage early to provide proactive advice on embedding controls and managing risks from the outset, preventing costly issues down the line. Their ability to pivot and provide rapid assessments on these fast-moving projects is a hallmark of a truly dynamic function.  

Contrast this with a static, "check-the-box" internal audit approach. Such a function might diligently execute a plan set at the beginning of the year, regardless of significant shifts that occur during that time. They might spend weeks auditing a stable, low-risk area while a major system implementation or a new cyber threat emerges unchecked. This static approach provides assurance on yesterday's risks but can leave the business vulnerable to the challenges of today and tomorrow. It's like using an old map to navigate a rapidly changing city – you might know where some things are, but you'll miss all the new developments and potential roadblocks.

For example, in a manufacturing setting increasingly reliant on connected devices (IoT), a static internal audit might continue focusing on traditional production process controls. A dynamic team, however, recognising the growing cyber risk to these devices, would quickly shift focus to assess the security controls around this operational technology, potentially preventing a costly production shutdown due to a cyberattack.

In a retail company implementing a new customer data analytics platform, a static internal audit might wait for the next scheduled IT audit cycle. A dynamic team would engage early, reviewing data privacy controls and system security during the implementation phase, helping to ensure compliance and protect sensitive customer information from day one.

Embracing a dynamic approach transforms internal audit from a historical reporting function into a proactive, agile partner in navigating uncertainty and driving successful change. By staying connected to the business, sensing risks continuously, and maintaining the flexibility to adapt, a dynamic internal audit team provides timely, relevant assurance and insights that are essential for building resilience and achieving success in our fast-changing world. It's about ensuring your assurance function is as agile and forward-looking as your business needs to be.

See our next post: Seeing Around Corners: How Internal Audit's Risk Assessment Powers Better Business Decisions