Becoming an Agile Internal Audit Department

The agile internal audit methodology was designed to maximize efficiencies and collaboration with a project’s stakeholders. Agile auditing helps teams put together audit plans and results more efficiently, using a collaborative environment. When clients and stakeholders have a direct line of communication and are encouraged to seamlessly collaborate, everyone can access audit report results and findings as they come in, also bolstering more ownership on areas of improvement.

As the benefits of making the transition to agile auditing are well-documented, organizations may eagerly jump into this transition, only to be blindsided with unexpected challenges during implementation. Based on our experiences supporting the transition to agile auditing with a corporate internal audit department, here are our tips for how best to get started, avoid complications and be as proactive as possible.

Learn the Terminology

One of the biggest challenges during implementation, much like when learning a new skill, is the knowledge gap pertaining to verbiage. To streamline learning, see below for a list of terms your team will encounter when diving into the environment of agile internal audits.

  • Scrum – Project management framework utilized to address complex, adaptive problems by working to complete tasks in small increments. Typically, the scrum framework is used for new/difficult audits, operational audits, and when stakeholders want to be actively involved.
  • Kanban – Project management framework used to encourage a lean method to promote efficiencies. This is achieved through visualizing tasks and continuous flow. This framework aims to be as lean as possible, which is most appropriate for SOX and routine audits.
  • Scrum or Kanban Board – Audit artifact maintained by the team to visually show the overall status of the audit in easily digestible columns.
  • Scrum Team – Group of collaborators working to complete the audit and deliver the final product. Traditionally, this is referred to as the audit engagement/project team.
  • Scrum Master – Member of the scrum team (often the audit manager) responsible for aiding the team in obtaining the information and support needed to achieve the audit goals. This role works to remove distractions and impediments to allow constant focus.
  • Product Owner – Role maximizes the value of the audit for the client and audit committee. They are responsible for managing the audit plan in alignment with the team’s vision and strategy. This role is typically an audit director or chief audit executive.
  • Sprint – A scheduled interval during which audit goals are to be met, like an engagement schedule. For example, planning, fieldwork and reporting would all be separate sprints.

Take Time to Reinvent & Reshape

A shift toward agility is organizational, which is challenging due to countless reasons, like a lack of resources, corporate culture and familiarity with old habits. This not only changes the way your audit works; it adjusts the mindsets of the audit team and audit stakeholders. While putting in the kick-off work to make the shift to agile audits, remind your team and yourself of the benefits of agile internal audit methods.

Many organizations signify the alignment of mindset and process by creating a manifesto. A manifesto can be compared to the current internal audit charter, demonstrating the vision and mission of the team. This audit artifact should identify the values of this new, more proactive, productive, and value-driven internal audit department. The values determined by the team are documented in the manifesto, which can be updated and edited as values change.

Start Small & Implement in Pieces

Agile is a concept that takes time to learn, which is not made easier with the day-to-day tasks of your internal audit team. Rather than making a U-turn from a traditional internal audit into an agile approach, roll out the concept of agile to your team in pieces. The way in which this has been done is by applying agile concepts to your current methodology. For example, your team can schedule the typical stand-up meetings or utilize a Kanban board to display the current audit status and blocking points. When you are ready to transition to a fully agile approach, apply the scrum or Kanban framework to a pilot audit. Having a pilot audit minimizes disruptions to your audit plan, as this transition faces additional challenges from the learning curve.

Your Next Steps for Agile Auditing

Agile auditing is becoming a more well-known and used approach for many internal audit teams. Improving time requirements and strengthening interaction, work efficiency and collaboration helps internal audits solve organizations’ day-to-day challenges. The key to acquiring these benefits is successful implementation and transition. For agile coaching, contact our team at Sikich today.

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. In addition, this publication may contain certain content generated by an artificial intelligence (AI) language model. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

About the Author