Agile Audit Framework
ComplianceFinanceTax & AccountingJuly 26, 2021

Agile audit framework: A guide for internal audit teams

An agile audit framework can help internal audit teams create more relevant audit plans and execute more efficient, effective audits.

With an agile audit framework, internal audit teams continually update audit plans and explore findings along the way. In contrast, the traditional audit framework typically involves establishing an audit plan at least a year in advance and going through all the auditing processes sequentially before presenting the results to management and boards.

In this guide to agile auditing, we’ll explore:

  • What is an agile audit framework?
  • Why use an agile audit framework?
  • What are some agile auditing examples?
  • How can internal audit teams implement an agile audit framework?

What is an agile audit framework?

The term agile audit framework stems from the agile framework that first became popular within software development. The original “Manifesto for Software Development” from software developers, created in 2001, states the following guideposts:

  • Individuals and interactions over processes and tools
  • Working software over comprehensive documentation
  • Customer collaboration over contract negotiation
  • Responding to change over following a plan

As the manifesto adds, all of these areas have value, but the agile framework prioritizes the ones on the left side of this guidepost paragraph over those on the right. So, instead of rigidly following an A-Z process of documentation and planning and then fully completing development before testing, the agile framework is more flexible. There can be testing, input, and changes made along the way.

“Working software is the primary measure of progress,” is one of the principles of the Agile Manifesto.

So what does this all mean for internal auditors? An agile audit framework follows a similar philosophy to that of agile software development, with the difference being that instead of aiming for working software, the end goal of agile auditing is to have a timely audit plan that’s executed collaboratively to help everyone get more from audits.

Like with other forms of agile, an agile audit framework often involves short periods of dedicated work, known as sprints, which last a few weeks. During these sprints, audit teams go through all the stages from planning through to presenting results. Audit teams then conduct review periods before starting the next sprints. Or, an agile audit framework could use more flexible project management processes based on available resources and current business needs.

Why use an agile audit framework?

The flexibility of an agile audit framework typically enables internal audit teams to make adjustments to audit plans much more quickly than if they spent a whole year following a predefined process.

Keep in mind that sharing results with management and board audit committees, for example, doesn’t have to be as in-depth as it would be with a year-end presentation. But by garnering their feedback along the way, an internal audit team can better align audit plans to the organization’s overall goals.

What was relevant at the beginning of the year might not hold the same weight at the end. New risks and priorities can emerge, so an agile audit Framework provides internal audit teams with a way to stay on track with what’s relevant to an organization.

“Annual audit plans and risk assessments are antiquated. More frequent and fluid cycles are needed,” notes PwC.

What are some agile auditing examples?

Looking at agile auditing examples can help demonstrate the value of an agile audit framework.

One agile auditing example could be where an internal audit team breaks up different components of an audit into bite-sized chunks, each of which can be tackled in a couple weeks. All the planning, execution, reviewing and reporting happens within that timeframe so that any errors can be identified and management’s feedback can be incorporated for the next sprint. In the end, the final audit report could be stronger.

Another agile auditing example could be where an audit team develops a plan to work on combined assurance and then present those results to management in one-week sprints. Agile auditing teams could work with, say, compliance one week and enterprise risk management the next so that internal audit teams can course-correct along the way, rather than waiting until after the full combined assurance process ends.

How can internal audit teams implement an agile audit framework?

Implementing an agile audit framework requires internal audit leaders to both adopt new principles along with new frameworks. Audit teams can choose to follow different types of agile frameworks, such as scrums or Kanban. The former involves sprints and ongoing iteration, while Kanban is more so about visualizing and organizing the tasks an audit team needs to accomplish to shift resources where they’re needed and adapt to changing business priorities.

Either way, software can help. Project management tools can be used to organize agile processes, and audit-specific software like Teammate+ can help foster collaboration and analytics into the creation and sharing of audit plans.

 

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