Increasing visibility and value of technology internal audit

More and better technology needed to keep pace

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Richard Knight

Principal, Advisory, and U.S. IT-Internal Audit Solutions Leader, Technology Risk Management, KPMG US

+1 703-286-8393

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Matt Tobey

Advisory Managing Director, KPMG US

+1 480-459-3601

ANCHOR TITLE FACTS

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Survey highlights

62% cite unforeseen geopolitical risks as a top organizational challenge in MANAGING impacts of inflation
82% expect to raise prices by the rate of inflation (52%) or more (30%)
72% envision passing on price increases in three to six months
74% are looking at right-sizing staff as a means of offsetting the impact of inflation
Nearly 40% plan to allow all employees to work remotely to reduce real estate and related spending
65% anticipate increasing their technology spend by 5% to 20% to mitigate inflationary impacts

As we progress into 2023, technology internal auditors should consider opportunities to raise their profile and boost their value to the company. Technology internal audit’s role is likely to be more challenging this year than in the past. Most businesses are anticipating strong economic headwinds and are already investigating—if not actually implementing—cost-saving measures, like hiring freezes or even reductions in force. Also, as expectations from regulators, boards, and investors continue to increase, the need to develop and maintain effective, data-driven compliance metrics is more vital than ever.

To improve the company's exposure and to be effective, the technology internal audit function should focus on:

Developing and maintaining confidence and trust inside the company
Comprehending the overall organizational structure, objectives, and difficulties in order to more accurately analyze the changing risk environment.
Including cutting-edge, more effective technology-based audit techniques. Utilizing automation, artificial intelligence, and data analytics are examples of this.

Three ways to improve IA visibility and increase value

Technology IA team members must not only have outstanding accounting and auditing skills but also possess broad skill sets that may not have been as important in the past. IA members will need to be able to think critically, solve problems, and be adaptable if they want to raise their visibility and worth to the company.

Hone and broaden your skill set
- Take on a far larger role than just providing high-quality audits and financial reporting if it wants to establish itself as a major player in the industry.
Deliver real-time assurance for large-scale, high cost investments
- Strive to provide real-time evaluations of risks related to operations, services, and products.
Take advantage of new technology
- Adopt evolving and innovative technologies to assist with risk assessment and audit execution, including deploying automation, RPA, advanced data & analytics, and AI.

Learn more by reading our new article.

Increasing visibility and value of the technology internal audit function

Ways that technology internal audit can add value to the business, increase its visibility, and find ways to do more with less or limited personnel.

Growth in 2022, Outlook for 2023

80%

of retail executives surveyed reported increasing top line revenue from 2021 to 2022, with 75% reporting increases in operating profit.

72%

of executives anticipating a recession lasting a year or less, which was less optimistic down 9 percentage points from 81% in August

Operational Challenges and Priorities

Inflation is the most significant concern with the top 3 ranking challenges unchanged from August to December: 80% increased operating costs, 75% increased product input costs, and 50% eroded margins. The largest increasing concern since August is challenges to long term planning at 45% up from 38% in August.

How KPMG can help

Rapid changes in business models, regulatory requirements, and technology disruption present opportunities for internal audit growth. To provide enhanced value, internal audit must harness data and emerging technologies and challenge the status quo. In doing so, it will help reduce risk, improve controls, and identify potential efficiencies and cost benefits across the organization.

KPMG Technology Risk professionals can help assist your technology internal audit functions focus on these three goals and help improve your company’s strategic and growth priorities.

Our method can help you achieve:

Enhanced assurance and resilience through use of technology
Deep insights into risk
Business improvement and impact

Also of interest: The KPMG 2023 Global IT Internal Audit Outlook

Drilling down into effective ways for technology IA to bring a strategic point of view to the business, this report offers holistic risk assurance, adopt creative methods to attract talent, and embrace innovative new ways of working.

Read it here

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Structural shifts are more profound than cyclical shifts, as they upend existing business models. Knowing the trends already underway is a powerful advantage when hedging risk. We look at the top 10 structural changes reshaping the economic landscape today.

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