KUALA LUMPUR (Nov 15): Some 60% of chief audit executives (CAEs) believe their functions do not have a strong impact and influence within their organisation, an improvement of 18% from 2016, according to a survey by Deloitte PLT.

The survey covering more than 1,100 practitioners in 40 countries, shows there is a rising trend to innovate the function’s current practices to keep pace with their organisation's evolving needs.

“As organisations adopt new strategies and harness risk while pursuing new opportunities, the internal audit function provides vital support, and is poised to do more,” Deloitte said in a statement.

“Particularly in the current environment of ongoing disruption, executive teams and boards benefit from the objectivity, integrity and enterprise-wide, holistic viewpoint that internal audit provides,” said Deloitte Malaysia’s Asia Pacific and Southeast Asia operational risk leader Cheryl Khor.

The survey shows only a small percentage of the group view their function “very positively” and about 20% of internal audit practitioners do not have alternative resourcing models.

More than 40% of CAEs in the survey think current practitioners lack strong key skills in specialised areas and believes innovative approaches and technologies will impact and transform the internal audit function.

These findings indicate a need for internal audit to deliver more value around issues and risks that impact an organisation’s ability to keep the role of internal audit relevant, and to improve reporting, communication and internal branding, the statement added.

It also said Deloitte’s global internal audit leader Terry Hatherell called for internal audit to address their priorities to deliver even more value in the changing organisational landscape, during a roundtable session with other Malaysian CAEs.

“External forces are rendering current tools and methods less effective, hence it is important to look into adopting modern approaches and technologies such as data analytics, robotic process automation, predictive analytics, risk sensing, Agile Internal Audit and integrated assurance which represent the future of internal audit — Internal Audit 3.0.

“Adopting new technologies and processes is the first step towards developing an innovation-driven mindset, as opposed to compliance-driven, in an effort to future proof internal audit against the unprecedented speed of change seen. A proactive approach to innovating current practices would greatly benefit the function and, as a whole, the organisation, in the long run,” Hatherell said.

Malaysia Airlines Bhd’s head of group internal audit Datuk Merina Abu Tahir agreed that organisations need to upgrade their internal audit functions, due to the changing economic landscape in the country.

“It is only fitting that internal audit too change and adapt to new technologies and processes as a practice in instituting good governance. Through appropriate structuring, comprehensive consideration of risk and effective reporting, internal audit can add significant value to the organisation,” she said.