Businesses looking to boost their competitive advantage in today’s challenging operating environment should be making full use of the expertise available to them, in particular their internal auditor, says Kapil Kukreja, risk and assurance partner at HLB Mann Judd Melbourne.

He says that the role of the internal auditor has changed significantly in recent years, with many organisations now relying on them to help achieve their strategic goals.

“Many boards and senior management are increasingly recognising that they can use internal auditors to play a big role in the company’s ongoing success.

“In the past, audit was primarily seen as a form of “defence” – helping improve internal operations by evaluating procedures and processes and ensuring accurate and timely financial reporting.  It was a fairly static role and largely backwards-looking to ensure that processes were working correctly and to identify any areas that required fixing.

“However the internal audit role is now seen as a strategic partnership role, with the ability to add value by identifying gaps in resourcing and improving efficiencies through practical recommendations to enhance business operations.  

“As such, internal audit is now taking a forward-looking approach to ensure a company is adequately resourced and equipped.

“Those companies that aren’t working with their auditor, and other experts, in this way, risk being left behind as the pace of change in the business world continues to accelerate.”

He adds that as well as identifying opportunities for business improvement and efficiency, internal audit is also a key factor in risk management.  

“Internal auditors can tailor their recommendations and approaches towards an organisation’s particular needs.

“For example when conducting reviews, an internal auditor would factor in the maturity of the organisation when considering particular functions or processes. Their recommendations should act as road map for the organisation addressing identifying gaps and adding value by considering the resources available (financial, operational and technological), which can aid an organisation to achieve its pre-determined goals.

“Organisations can no longer allow different departments and areas to operate as silos, concerned only with their own areas and responsibilities.  The use of technology has created an interconnected world where everyone is vulnerable to risks such as geopolitical tensions, economic turmoil, or cyber hacks.

“This is particularly critical as the legal obligations of directors overseeing the affairs of a company become more stringent.  This requires them to be fully up to date on what is happening at a company, including its financial position and its risk management processes.”

Mr Kukreja says the shift has come about because internal auditors are now recognised as having the expertise and knowhow to take a holistic view of the organisation and how various processes work together.

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