Innovative Solutions from Within: The Power of Internal Audit in Business Transformation
Dr Ahmed Shawky Mohammed
LBS Sloan Fellow | Sustainable Business Transformation | Board & Audit Committee | Sustainability Tech Innovator| Sustainability Assurance| Purpose-driven IA | CAE Advisor | CPA, CIA | Lifelong Learner
Innovation and creativity are often associated with business success, but the role of internal audit in driving innovation may not be well-known. Internal audit teams are usually seen as playing a supporting role in protecting organisations, but they can also play a crucial role in identifying and implementing innovative solutions to business challenges. This is becoming increasingly important in today’s rapidly changing business landscape.
The role of internal audit is evolving, and it is now being recognised as a valuable source of truth and solutions.
The role of internal audit is evolving, and it is now being recognised as a valuable source of truth and solutions. Internal audit teams have a unique perspective on an organisation’s operations, risks, and controls, which gives them the ability to identify and implement innovative solutions to business challenges. As organisations continue to face complex challenges, internal audit can play an increasingly important role in driving change and innovation.
The Importance of Innovation by Internal Audit
The importance of innovation by internal audit lies in its ability to help organisations achieve their strategic objectives, mitigate risks that matter, and succeed. By identifying and mitigating risks, improving processes, and sharing knowledge, internal audit can help their organisations to operate more efficiently and effectively. Innovation by internal audit can also help organisations to build trust with stakeholders, such as customers and investors, by demonstrating a commitment to ethical and responsible behaviour.
Challenges of Innovation by Internal Audit
Despite the importance of innovation by internal audit, there are a number of challenges that internal audit teams face in driving innovation. Perhaps one of the biggest challenges is the perception that internal audit teams are risk-averse, which can make it difficult for them to take risks and try new practises. Additionally, internal audit teams may not have the resources or expertise to drive innovation, which can make it difficult for them to identify and implement innovative solutions.
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How Internal Audit Can Overcome Challenges
To overcome these challenges, internal audit teams can take a number of steps. For example, they can build relationships with other parts of the organisation, such as the strategic planning unit and the IT department. This will help them to better understand the organisation’s needs and challenges. Additionally, upskilling on innovation and creativity can help internal audit teams to widen their horizons and be better prepared. Finally, internal audit teams can develop a culture of innovation within their own team by encouraging employees to think creatively, critically, and share their ideas.
Conclusion
In conclusion, innovation and creativity by internal audit is an important but often overlooked. By identifying and implementing innovative solutions to business challenges, internal audit teams can help organisations to achieve their strategic objectives. While there are challenges to driving innovation by internal audit, there are also steps that can be taken to overcome them. By building trusting relationships and developing a culture of innovation, internal audit teams can become a key player in driving business transformation.
Experienced Internal Control, Regulatory Compliance, Audit & Risk Management Professional
1yEmpowerment and speaking up are some behaviors that team or organisation need to have to foster a culture of innovation and creativity. One innovation for internal audit is data analytics. Traditionally, samples are selected randomly to perform testing. However, with data analytic tools, not only internal auditors are able to provide factual information to the organisation, but internal auditors can also tell "stories" by providing value-added observations which can be useful to management. I remembered when we provided the dashboard which tells a story to the management, they started thinking more deeply about the effectiveness of controls and processes particularly monitoring and oversight and governance.
MBA, M.Sc, ISO 27001 LI, ISO 31000, COBIT 5 Assistant Manager
1yVery interesting take and agree with you on this.
𝙄𝙣𝙩𝙚𝙧𝙣𝙖𝙡 𝘼𝙪𝙙𝙞𝙩 𝙁𝙪𝙣𝙙𝙖𝙢𝙚𝙣𝙩𝙖𝙡𝙞𝙨𝙩
1yWell said. Conventionally, creativity and innovation are not among the internal audit challenges. However, internal auditors will either join entities in creating values or stay irrelevant.
Executive Director with 25+ Years in Saudi Arabia's Construction & Retail Sectors | M&A Advisor | Strategic Consultant | Startup Mentor & Ecosystem Builder | TEDx Speaker
1yIt is very important to foster a culture of innovation within the organization to navigate through changes and specially in nowadays with the high volatility market and unknowns . The most important part is that all shareholders need to have #resilience at work to foster those innovations by empowering their employees and given them autonomy & freedoms to experiment . The employees need to have belonging into the #culture of the organization. But most importantly, they also need to have the required competence and skill sets to make it happen . Thank you for the article Ahamd and I do believe that internal audit plays a fundamental role in this part of creating innovation.