The Digital Transformation of Auditing and the Evolution of the Internal Audit

Abstract

This book discusses the digital transformation of auditing and its impacts on internal audits. It poses the question of whether digitalization significantly impacts internal audit practices and methodologies, information technology/information system audit, IT governance, and risk management. Internal audit, particularly IT audit, addresses corporate strategy and alignment, corporate governance, IT governance, agility, risk management, and compliance. The author manages emerging technologies, including artificial intelligence, blockchains, cloud computing, and data analytics. She presents diversified opinions concerning these issues of utmost importance to audit professionals. Auditors must develop new skills to deliver high-quality services in a digitalized environment consistently. Audit methodologies, processes, and tools used to conduct audits have progressively changed from those used by traditional audits. The internal audit function has gradually evolved from passive monitoring to strategic and dynamic consulting. Understanding the evolving risk landscape is challenging to the performance of internal audits. As a value-adding function, internal auditing is crucial in advising organizations and their stakeholders to ensure their objectives, manage risk, and improve governance processes. The author claims that there is a need for further research in internal auditing as new and emerging internal auditing activities involve technology. As a consequence of the digital transformation of auditing, the author assumes that audit regulators revise existing auditing standards or codify new ones to reflect the technologically driven changes.