The relevance of internal Audit in this digital age, putting a focus on the Republic of Liberia

By Samora P. Z. Wolokolie, Ph.D., CFE, CA, CPA, FCFIP, FIPA, FFA, CTP.
Deputy Minister for Fiscal Affairs
Ministry of Finance and Development Planning (Republic of Liberia)

September 16, 2020

Technology has revolutionized businesses, providing real-time intelligence and changing how we govern and make decisions. Cognitive technologies like predictive analytics have churned innovative and smart ways of working to deliver value and results. Traditional tasks are being greatly improved, for instance, credit analysis, transaction processing, target marketing and fraud detection have significantly changed. The modern Internal Audit function has to keep up with the pace. In fact, it has to position itself ahead of the pack because it is a key stakeholder in ensuring that complete and accurate information is relayed to the board.
No doubt, Artificial Intelligence (AI) is fast becoming the disruptive innovation of the century, shaping how we live and how businesses are run. This is a perfect opportunity for internal auditors to roll up their sleeves, participate keenly and guide organizations to better optimize the risks and opportunities they face. Internal audit professionals will provide values to organizations by employing their skills in understanding and linking strategy and AI objectives. If internal Audit functions are to remain relevant in this conversation, they have to prepare adequately in the following three critical areas.

 

AI governance and ethics.
Internal Audit professionals have to assess whether accountability and oversight is in place to support. AI and data governance frameworks. These frameworks have to be measured and monitored against the organization’s values and ethics. AI forces organizations to refocus on ethics, storage and appropriate use of information. For instance, with the current spotlight on data privacy and ethnical use of data, companies using AI will need to observe stringent compliance and regulatory requirements. Overall, the framework on AI has to cover data use and infrastructure, accountability and regulatory compliance.

Data Quality
Internal Audit have to query whether the data maintained and used by organizations is accurate, complete, transparent and reliable to assist management and the board to make informed decisions. Most organizations do not have a documented structured approach to managing, analyzing and generating insights from their data. Many times information is achieved in different systems that do not integrate. This presents significant challenges on how data is synthesized, interpreted and what conclusions can be drawn.
Internal Auditors have to remember that there will be need to provide insight and hindsight. It is the use of data to provide foresight however, that will be the game changer. Internal Auditors have to study the data and challenge management on its use to assess mitigations and opportunities available.

Assessment of cyber-security and technology risks.
With AI projects becoming a necessity, they pave way for more risks and opportunities than we can imagine. Organizations across the globe need to build robust cyber-resilient strategies that are resistant, proactive and that continuously improve. Cyber-attacks and technology shutdowns will increasingly appear on the top list of our concerns. The famous “top risks” it is the duty of internal Auditors to sensitize the board members and discuss these risks and opportunities in equal measure. There is no magic bullet to resolving emerging challenges- Internal Audit professionals have to drive value through innovation, use of AI and challenge the value drivers of AI. Internal Auditors roles are becoming more defined in this digital age, transforming into a value partner.
It is definitely time for internal Auditors to understanding their role in AI and most importantly the risks and opportunities that can be harnessed. This is a call for all Internal Auditors to learn, unlearn and relearn in this digital age. No doubt, Internal Auditors will stand up to be counted and work collaboratively with management to provide foresight in this digital age.

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