The Pain of Automation: Internal Audit Functions Face Real-World Challenges Amid Optimistic Environment

Internal audit leaders are looking at automation technologies for many of the same reasons as business management. Automated processes can run in the background, allowing auditors to look at more things in less time than they could manually. Also, deviations from expected or acceptable results can be brought to auditors’ attention more quickly (in near-real time) than with periodic manual review. Advantages such as continuous monitoring, automation of repetitive processes and the ability to audit large populations (as opposed to sampling) offer internal audit departments the opportunity to expand their view, do more with limited resources and, most important, provide greater value to the enterprise.

In light of these possibilities, optimism around automation in internal audit is understandably high. In a recent survey, nearly half of US risk and compliance professionals, internal auditors, executives and board members surveyed said their organization planned to modernize its compliance function in the year ahead. However, according to another study, just 14 percent of internal audit functions could be considered advanced in their technology adoption (including the use of robotic process automation [RPA] to expand the expediency and coverage of their audits), while 83 percent are either adopting advanced technologies at a slower pace or not at all.

These findings suggest that, in spite of the promised benefits of automation, internal audit departments are encountering hurdles on the path toward realizing those benefits. Three of the key hurdles that almost any internal audit function will come up against are choosing the right processes to automate, getting the solution (i.e., software) developed and navigating the complex ways in which automated internal audit processes interact with other areas of the business.

Process Identification and Selection

One of the fundamental challenges internal audit departments face in implementing RPA is choosing the process, or processes, to be automated. It is not always obvious what the department should focus on or prioritize.

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