Industry Interactions Konsult

Agile Auditing: The guiding light through COVID-19

As the organization’s environment and way of working is evolving in a way never thought before, the internal audit executives face challenges. As it is the obligation of the audit executive, and an opportunity on hand to help their organisation in managing the risks faced during and post COVID-19.

Today, Konsult- attempts to share with you the aspects of agile auditing which can be one of the navigation tool in times of stress.

In the blink of an eye, a ferocious pandemic, none other than the Covid-19 has upended the world’s operating assumptions. Who would have thought that the year 2020 would be devastating on such a magnificent scale, the world would seem to come to a halt. It has impacted and disrupted almost the whole world and triggered significant downside risks to the overall global economic outlook, across borders and geographies.

As the organizations struggle to cope up with the disruptive impact and adapt themselves to combat the effect by supporting the existence and operations, the internal audit (IA) function is a catalyst for improving an organization’s governance.

It is dealing with the issues that are important to the survival of the organization, is likely to see a change in its process of identifying and monitoring the organization’s overall risk.

Beyond the traditional model

There has been a status quo for the past few years to conduct the risk assessment
process annually, or even less frequently and often shifting the focus of audit plan when something came up which required immediate attention.

But the current dynamic environment demands that the internal auditors retool themselves and their approach towards the risk assessment to ensure the health of the organization; while continuing to provide timely assurance and valuable insights to the leading executives.

They should take the passenger seat for the organization and make it aware of the road conditions which are the changing business conditions from the regulatory matters; to the changing customers’ behavior; to every aspect which might put the organization’s existence in danger.

One such skill and tool that the internal auditors must adopt to be useful at the
moment is the new age auditing technique of Agile Auditing which gives flexibility required to move at the speed of risk which is the highest possible speed in the current dynamic environment.

The agile approach means working in a highly responsive way so you can deliver
the services in the way organization wants and that the same time needs them. It
originated in software development but can helpful for audit departments in more than one way to reduce audit costs, save time, and improve audit quality at the same time.

On the brighter side

The agile auditing process is based on flexible, iterative planning on an ongoing
basis and besides, it focuses on continuous communication and collaboration, both among the audit team and with stakeholders. This is very different from what we have always seen in the traditional IA model of working in long phases, evaluation of data which might take weeks, and then conduct the risk assessment.

Internal auditors should behave more like a proactive team when providing consulting. Keeping up with the need of the hour is challenging for the auditors but it opens the door for the new opportunities to tap on at the same time. Collaborating with the different departments at a more integrated level and spreading the use of new digital tools like data mining and artificial intelligence as agility is more than just a methodology.

Introducing Robotic Process Automation (RPA) as a part of agile auditing has
become an efficient way to automate labor-intensive and repetitive tasks. A survey estimates that 45% of workforce tasks can be automated which can save an estimated $2 trillion in global workforce cost.

As the organizations are already struggling to earn enough revenue and cover their costs in this global pandemic.

Since the nations have just started to lift the lock downs many employees are working from home or the offices are running at 50% of the capacity, RPA can automate the manual tasks.

It can help IA to increase productivity, expand its risk coverage, and help in
addressing the ongoing compliance burden by doing more with fewer resources.

Some of the major benefits of RPA in internal audit are reduction in sampling risk as the automated testing can expand the audit coverage by examining the full population of data rather than testing only a small percentage of population through sampling and can increase the frequency of testing, making audit a continuous process model.

RPA can automate the tracking of progress on the audit plan and continuous monitoring of the key risk indicators against the traditional IA procedures of annual audit plan. A large portion of the time is saved in reporting and dash boarding activities by generating on time audit and management reports.


For effective implementation of RPA foremost requirement is to partner with the security team and develop security policies for privacy and data protection seeing surge in digital fraud cases. The IA team should ensure their members are tech savvy to perform the audit remotely.

In Long term

Auditors need to keep thinking about the step ahead, as the nations are ready to
unlock the ongoing lock down, when the market place and economy gradually set
their foot again. Still the economy is in the response phase, but when the economy starts to recover, the agile auditing will have to modify itself again.

For instance as the supply chain has been extensively impacted in the recent times, it needs the audit department to re-asses the third party risk assessment and check that are the third party networks of the organization resilient in these changed circumstances.


There are other areas too which have come under stress during Covid, such as
inventory management, cash flows, Liquidity management, availability of enough capital, etc., towards which the auditors can shift their focus in this recovery phase. These new indicators can be incorporated and prioritized in the risk assessment process.

In the long term, post recovery phase the most important task is to analyze and list down the lessons learned in recovering from the crisis. With the other aspects of the agile auditing, the best one is to involve as many departments possible because by doing so it increases the acceptance of this mind-set of being agile in the internal audit functions.

There should be a continued effort towards increasing the use of digital tools to ensure that the organization becomes resilient to crisis like this we are facing. So the agile auditing seems to be the guiding light for the internal audit function as it enables the auditors to reassess and shift resources as priorities change in this dynamic environment of global pandemic.

The COVID-19 crisis brings the new challenges to the IA teams but they use this
crisis to reflect upon on their ability to counter such situations and build resilience for future. This article is surely not an absolute answer but an attempt around finding some of them.

(Image Source: Google)

Author: Swapnil Gupta

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