Real Time Assurance: Part 1 - Sharpening Your Internal Audit Focus in a Fast-Paced World

In today's rapidly evolving business landscape, the need for timely and relevant assurance has never been more critical. Traditional internal audits, while comprehensive, often operate on cycles that can feel out of sync with the speed of change. Risks emerge, processes shift, and new systems are implemented at a pace that demands a more agile approach to assurance. How can internal audit keep pace and provide the timely insights that stakeholders truly need? Enter Real Time Assurance.

What Exactly is Real Time Assurance?

Real Time Assurance is a dynamic and focused assurance activity designed to provide rapid insight into a specific, narrow area – typically a single key control or a critical process. Unlike traditional audits that might span several weeks or months and cover broad scope, Real Time Assurance is characterised by its compressed timeframe, often completed within approximately two weeks from start to finish.

The core idea is to deliver focused assurance when and where it is needed most, particularly in areas experiencing rapid change or heightened risk. It's about providing a quick, sharp assessment rather than an exhaustive deep dive.

Why and When Should You Use Real Time Assurance?

The agility of Real Time Assurance makes it a powerful tool in specific circumstances where a full audit isn't feasible or timely enough. Consider deploying Real Time Assurance when:

• Emerging Risks Demand Immediate Attention: New cybersecurity threats, sudden regulatory shifts, or unexpected operational disruptions can create urgent risk areas that require rapid assessment.

• New Initiatives Go Live: The implementation of a new critical system, process, or product often benefits from swift assurance over key controls or functionalities right after deployment.

• Specific Incidents or Issues Arise: Following a control failure or an identified issue, a Real Time Assurance review can provide a focused look at the root cause and the effectiveness of immediate corrective actions.

• High-Risk Controls Need Validation: When a specific key control is identified as particularly critical or potentially weak through continuous monitoring or risk assessment, a focused Real Time review can provide timely validation.

• Supporting Agile Business Projects: In agile development environments, Real Time Assurance can provide quick, iterative feedback on controls embedded within new functionalities or processes as they are developed and released.

• Providing Pre-Audit Insights: Sometimes, a rapid assessment is needed to understand the control environment in a specific area before committing resources to a full, potentially broader audit later in the cycle.

Real Time Assurance is not a replacement for comprehensive annual audit planning or in-depth audits, but rather a valuable complement that enhances the internal audit function's responsiveness and relevance.

Setting the Scope for a Successful Real Time Assurance Activity: Given the tight timeframe, a clearly defined and narrow scope is paramount to the success of a Real Time Assurance engagement. An overly ambitious scope will quickly derail the process. When setting the scope:

• Identify a Singular Focus: Concentrate on one key control or one specific, well-defined process or sub-process. Avoid the temptation to expand the scope to related areas, no matter how tempting.

• Define Limited, Achievable Objectives: What specific question(s) are you trying to answer? Ensure the objectives are precise and can realistically be addressed within the ~2-week window. For example, instead of "Review the procure-to-pay process," focus on "Assess the operating effectiveness of the three-way match control for high-value invoices."

• Commit to the Timeframe: The ~2-week duration is a defining characteristic. All planning and execution must be geared towards this limit.

• Identify Key Stakeholders: Determine who can provide the necessary information quickly and who needs to receive the rapid feedback. Limit the number of stakeholders involved to maintain speed.

• Assess Data Availability: Can the necessary data and documentation be readily accessed and reviewed within the timeframe? If not, the scope may need to be adjusted.

• Clearly Define What's OUT of Scope: Explicitly stating what will not be covered is just as important as defining what is included. This helps manage expectations and keeps the review focused.

The Undeniable Benefits of a Focused Scope: A tightly defined scope isn't a limitation in Real Time Assurance; it's a critical enabler. A focused scope allows the internal audit team to:

• Work with Speed and Agility: By limiting the scope, the team can move quickly from planning to execution and reporting.

• Deliver Targeted Insights: The output is a sharp, focused assessment on a specific area of concern, providing clear and actionable insights to management.

• Minimise Disruption: A short, focused review is less intrusive to the business area being reviewed compared to a lengthy, broad audit.

• Respond to Urgent Needs: The speed allows internal audit to provide timely assurance on matters that require immediate attention.

By mastering the art of setting a precise scope, internal audit functions can effectively leverage Real Time Assurance to provide high-impact, timely insights in a dynamic environment.

In Part 2 of this series, we will explore how to effectively report on Real Time Assurance findings, manage resulting actions efficiently, and importantly, how to integrate these valuable rapid reviews into your annual internal audit planning process for a more responsive and risk-aware function.