Agility in Internal Audit: Balancing Strategic Planning with Flexible Execution
This article addresses the common misconception that annual audit plans are antithetical to agile auditing. It argues that a high-level strategic plan is crucial for aligning internal audit with organizational objectives, while true agility lies in the flexible execution and prioritization of audit activities within that framework. Audit professionals should focus on delivering strategic value by adapting their approach to specific projects and continuously prioritizing efforts for maximum impact.
The Compatibility of Planning and Agility in Internal Audit
Many internal audit professionals grapple with the perceived conflict between creating an annual audit plan and embracing agile methodologies. This article clarifies that having a plan does not inherently negate agility; rather, rigidity in execution is the true impediment. The core objective of internal audit should be to deliver strategic value to the organization, and a well-conceived plan is essential for achieving this. Agility, in this context, refers to the flexibility in how those strategic goals are met, not the absence of direction.
Crafting a Strategic, High-Level Audit Plan
The Audit Explainer advocates for an annual plan that outlines high-level areas of strategic importance to the organization, rather than a detailed, rigid schedule of specific reviews. This approach allows for initial agreement with management and the Audit Committee on key focus areas, such as cybersecurity or finance, without committing to the exact scope or methodology of future audits. Including a top-level indication of resource allocation (e.g., time or criticality factors) can further facilitate discussions about strategic priorities, emphasizing that these are conversation starters, not immutable budgets.
Embracing Agile Execution within the Plan
True agility manifests in the execution phase. Once high-level strategic areas are agreed upon, internal audit can then apply an agile mindset to individual projects. This involves:
- Flexible Project Planning: Not committing to specific review methodologies in advance, allowing for adaptation based on evolving risks and information.
- Prioritization: Continuously asking, "Which project, and which step within that project, will provide the most value or 'bang for the buck' first?"
- Focus on Goals, Not Steps: Prioritizing the achievement of project goals over adherence to a predefined sequence of steps, which often leads to more efficient and impactful outcomes.
By adopting this approach, internal audit can demonstrate its role as a strategic asset, capable of adapting to change while remaining aligned with organizational objectives. The key is to view the annual plan as a strategic compass, and agility as the navigational skill to reach the destination effectively.
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