Agile auditing: 5 tactics to embrace this game-changing approach to internal audit
Unless you’ve been living under a rock for the past few years, you’ll likely have heard the buzz around agile auditing, and it’s certainly not unfounded.
But before we dive into the best ways in which to leverage this value-adding approach to internal audit (IA) - which time and again has been proven to elevate the status of the profession - let’s go back to basics:
What is agile auditing?
Simply put, agile auditing is about taking the traditional stages of an audit and breaking them down into smaller parts, delivering through incremental, iterative work stages known as ‘sprints’. This approach is derived from the software development world, where agile was introduced to decrease costs and time to delivery whilst improving overall quality.
With many potential benefits, agile auditing is also about continuous communication and collaboration with the near team and key stakeholders. Though above all, it’s a mindset, and, for the uninitiated, will require a shift in IA’s approach (and perhaps a slight leap of faith).
How can an agile audit approach benefit internal audit teams?
The core phases of the traditional waterfall method of auditing tend to lock audit teams into a long-term, inflexible plan that fails to adapt to emerging risks in a reasonable timeframe. With today’s immense demands on auditors to deliver value faster and sooner, this restrictive model simply can’t keep up.
In contrast, as risks continue to materialise at a rapid rate, taking an agile audit approach can bring a wealth of benefits, including:
- Greater transparency and insights
- Real-time assurance
- Better engagement with key stakeholders
- Improved productivity
- Quicker delivery of results
The point of agile auditing is not to enable auditors to predict the future. Rather, it is a way in which audit teams can be better equipped to nimbly change direction in the face of increasing unknowns and uncertainty.
Next, we look at five tactics you can employ as you begin your agile audit journey.
Putting agile auditing into practice
1. Adopt risk-based audits to deliver regular insights
The turbulent risk environment is understandably keeping many senior executives up at night. But it doesn’t have to be this way. By scrapping outmoded annual risk assessments, audit teams can instead focus on pivoting as and when new risks arise, enabling their organisation to respond more proactively.
Continuous risk-based audits also mean that there are far fewer surprises and auditors can deliver the relevant assurance at the right time. The frequency of your risk assessment updates will largely depend on your resources and the needs of your stakeholders. But we recommend starting with at least an update every quarter with a view to increasing them once you find your feet.
2. Accelerate the audit cycle
A great way to streamline your audit workflows is to break large projects down into manageable, bitesize chunks i.e., ‘sprints’. This can be further supported by dividing teams up into smaller and more focused units that can work to identify both roadblocks and efficiencies within their remit, delivering the desired results at speed.
Another way in which to get more from your audits in tight timeframes is to utilise tools such as Scrum and Kanban. Scrum concerns efficiency and quality, whilst Kanban looks at communication, collaboration and accountability. With different but harmonious outcomes, you may choose to pursue a hybrid approach if it fits with your objectives.
3. Get the most value from your time
We just mentioned some of the key strategies to speed up your delivery cycles, but what other factors could potentially be slowing your audits down? Perhaps one of the most common issues that auditors fall foul of is excessive admin and documentation. Can you currently justify the value of every hour of documenting? Whilst working papers are essential to the IA function, remember that it is the quality of the advice, assurance and insights that you are being judged by.
Scope creep can also be a strain on audit timescales. By targeting a set number of hours for every audit - and adhering to a consistent checklist - you can help to mitigate other items being thrown into the mix midway through a project. And for any exceptions? Work closely with your stakeholders to ensure these are carefully justified.
4. Listen and communicate in equal measure
Speaking of stakeholders, taking a more agile approach is a tried and tested way to boost engagement. Since the methodology follows an iterative process, stakeholders can be invited to provide feedback before, during and at the end of every sprint cycle. As opposed to being allowed to weigh in only until after they’ve reviewed the final report.
As soon as issues surface, communicate with senior leaders. This can provide a platform for collaborative working to effect significant change on agreed action items. Likewise, put more emphasis on listening. A good leadership team will have a thorough understanding of the organisation, risks and opportunities – knowledge that is invaluable to the work of internal audit.
5. Train your team in the art of agile
There are many qualities that auditors should have in order to bring value to their organisation. From an agile perspective, this will include the confidence, resourcefulness and adaptability to maintain focus on what’s most important - even when the goalposts continue to move.
That said, there’s always room for improvement, which is why specialised training for agility in internal audit is a no-brainer. Having your team develop a deep understanding of the agile mindset and relevant tools is the surest way to improve efficiencies across the entire audit lifecycle, as well as avoid some of the most common stumbling blocks.
It’s worth noting that embedding these tactics won’t happen overnight, nor will they provide a perfect ‘textbook’ example of an agile audit methodology right away. At first, you may still undertake most of your audits through a traditional approach whilst you try out new agile auditing techniques to discover what works for your business.
Ultimately though, it is the shift in mindset that is the crucial aspect here. With that, you’ll need to take your stakeholders on the journey too, since buy-in at every level of the organisation will be essential to making the transition to an agile audit approach a success.
Want to know how agile auditing can help your team to manage today’s risks and strengthen operational resilience? Check out our latest white paper.