Technology has expanded internal audit's reach considerably in recent years. With the advent of sophisticated analysis and communication tools, practitioners can now gather and examine data without ever leaving the comfort of their office — a process sometimes referred to as "auditing by email." But internal audit needs to be careful with technology, despite its convenience and capabilities, ensuring the tools do not lead to a cessation of fieldwork. Auditors who hide away in their offices and perform work from afar risk missing potentially key insights and communication opportunities.
In the past, nearly all operational engagements required physical visits to examine source documentation. Site walkthroughs and client face time were assumed — in fact, on-site activity often comprised a large proportion of engagement schedules. Today, many auditors can extract transactional data directly from enterprise resource planning systems and get all the information they need remotely. The transition to electronic data has made retrieval of original documents a less time-consuming and arduous process.
Nonetheless, internal auditors need to ensure the technology does not, in some ways, work against them. Communication is key, and it is more likely to occur regularly with internal audit staff available on-site. Ongoing communication helps the audit team understand the client's business, build relationships, and improve the design of audit procedures. Plus, it reduces the possibility of blindsiding clients with unexpected news.
Removing client interaction and physical presence on engagements can deprive internal audit of potentially valuable information. Without the auditors' eyes and ears on site, it can be much more difficult to obtain sufficient understanding of the internal control environment or help identify key risks that may threaten organizational success. The lack of presence also presents a challenge to consulting work, making the role of trusted advisor difficult to achieve.
Spending time on-site allows the audit team to better tailor its work to individual circumstances. When practitioners move through the organization and physically observe the client's environment, they can adjust the audit program more easily as new information becomes known. These adjustments, in turn, provide greater value to the client, and to the organization as a whole.
High-performing businesses need to stay focused on customers and their needs. By the same token, high-performing audit functions must be attuned to the needs of stakeholders — a task often best accomplished in person. Practitioners should avoid relinquishing their client interactions to technology and remember that the audit process is as much about building relationships as it is about individual effort. Great auditors not only excel at analysis and assessments — they also know when to close their laptops and step out into the real world.