Unlock business value with internal audit

Think you know when internal audit is needed? It might be time to think again.

Internal audit is often seen as a burden for regulated firms or something to consider only after a risk has occurred. But in reality, it is a valuable tool that can support decision-making and strengthen performance across many types of businesses.

It is time for boards, audit committees and management teams to reconsider how they view internal audit. Rather than seeing it as a compliance burden, they should recognise it as a valuable tool that can protect and create value when used effectively. 

Internal audit plays a key role in supporting organisational growth and strategic decisions. It helps protect the core value and resilience of a business. The process involves identifying current and emerging risks and opportunities and giving practical advice on how to manage risk and make the most of opportunity.

An effective internal audit function whether in-house, co-sourced or outsourced, reviews the governance, risk and control structures that support daily operations. It also evaluates change programmes, digital transformation and potential acquisitions in real time using the same approach. Yet few businesses fully tap into the practical value that internal audit expertise can provide. 

The role of internal audit is growing more complex as risks evolve, technology advances and regulations continue to change across sectors. 

Internal audit no longer to be feared

The traditional view of internal audit as a necessary evil that instils fear, acts as the controls police and exposes individuals is less common than it once was. However, it still exists within the culture of many organisations.

Organisations must move away from the outdated view of internal audit if they want to unlock its full value and avoid wasting management time and business funds on fire-fighting, dealing with the fallout from risk events and missing out on opportunities. We continue to see large firms spend up to ten times the cost of an internal audit service each year on these issues.

Instead of spending hundreds of thousands of pounds to fix major issues after a risk event, companies should involve internal audit early to support and guide management in delivering their strategic goals. Risk and strategy are closely linked. A business cannot deliver its strategy effectively without managing and reducing risks..

Forward-thinking organisations recognise the value of internal audit. They see how it strengthens efficiency and resilience, supports navigation through complex risks and improves governance, risk management and control.

Adopting a new approach to internal audit requires a cultural shift built on trust. Trust between the board and the executive and between the executive and the wider business allows people to feel safe admitting they have a problem or need support. This removes fear and can help businesses grow faster as a result.

This is the alternative to a culture where people try to hide problems which means they go unresolved and poor governance, risk and control practices eventually surface. This holds back growth because the business cannot seize opportunities or deliver as strongly as it intends.

Becoming invaluable strategic advisors 

Internal audit is evolving from its traditional process-focused role into a more strategic function. This shift is reflected in the updated standards from the Institute of Internal Auditors. Strong internal auditors serve as trusted independent advisors who show what good looks like across people, processes and systems. They also act as assurers who evaluate how well a business is structured and operating from a governance, risk and control standpoint.

Senior leaders and executives should rely on internal audit as a key business partner. This allows them to benefit from its deep understanding of the organisation and identify risk exposures before they lead to loss of talent, customers, knowledge or strategic opportunity.

As large organisations are already going through major cultural change driven by rapid technological progress and transformation, this is the right time to adopt internal audit as a key enabler and supporter of business growth.

An asset for businesses across all sectors

Internal audit is not just for regulated businesses such as banks which is a common misconception. Businesses of all types across sectors whether private, public, multinational or not-for-profit can benefit from a thorough internal audit and unlock real value.Some of our strongest success stories in internal audit have been with companies that were originally small family businesses. Often they have grown at pace, trying to manage without all the necessary knowledge inside the four walls and have ended up crying out for help. Being able to engage external expertise by means of internal audit is a cost-effective way of gaining, sharing and using risk expertise and insights.

No matter the business, senior leaders cannot be experts in financial control, outsourcing, business continuity, supply chain, data protection, cybersecurity and many other specialist areas. Internal audit can show what good looks like across the board, highlight areas for improvement and create a safe space for open conversations and shared advice.

Respond to more stringent regulations

Across sectors such as insurance, banking, financial services, e-Gaming, emerging technology, energy, pharma, construction and manufacturing, the regulatory context continues to become more onerous and transparent. 

When it comes to key thematic risks such as regulatory compliance, financial integrity, cybersecurity, operational resilience, market demands, product quality, health and safety standards and the general complexity of global business, one regulator tends to mirror another from a best practice perspective. Internal audit plays a critical role in ensuring compliance with complex regulatory requirements and industry standards. 

Not only are all sectors becoming more regulated, consumers, suppliers, third parties and the public have greater expectations of how businesses govern and manage risk, especially around increasingly emotive topics such as the use of AI, sustainability initiatives, supply chain practices or human capital management.

Internal audit: our approach

The internal audit process depends entirely on the risk maturity of the business and whether the need is advisory or assurance based along with other factors. Grant Thornton applies a tailored approach rather than using a one-size-fits-all model across a wide range of clients.

Internal audit plans are evolving to include a mix of audits, advisory reviews and programme assurance needs. This reflects the different levels of risk maturity across areas of a business.

We provide regular assurance to boards and audit and risk committees on change and transformation programmes to confirm they are well designed and being delivered effectively so they achieve the expected return on investment.  

Data analytics, automation and other technology is increasingly key to improving the efficiency and effectiveness of internal audit work, and that will only grow, helping to interrogate larger volumes of data and improve the value of the advice we give. 

An invaluable internal audit partner

It’s time for businesses to fully embrace what internal audit can bring to the table in driving future success. At Grant Thornton, we understand the new reality of internal audit and continue to make use of our tools, experience and insights deliver a best-in-class internal audit service to every client at every stage of their journey, regardless of their size, sector or risk maturity. 

Discover how internal audit can protect and sustain your organisation.