If you can see the full

picture, why settle for

a glimpse?
How to turn your IA function fully digital

ECIIA Conference Luxemburg

Martin Wiedemann

The better the quest ion. The better the answer.

The better the world works.
 Your speaker

Martin Wiedemann
EY, EMEIA IA Leader

The better the quest ion. The better the answer.

The better the world works.
Page 2
 Agenda
1 The case for change

2 What will the IA mandate be?

3 How will IA work in the future?
4 The EY way of going digital (EY Virtual Internal Auditor)

Page 3
 The case for change
Organizations are managing evolving consumer
1 expectations, new partnerships, dynamic ecosystems,
changing industry boundaries, disruptive business models
and new competitive domains.

Every industry is changing and the cycles of change

are moving ever faster.
2
Industry convergence is touching every market
3 segment.
From technology and climate, to geopolitics and trade,
4 the outside landscape is changing dramatically.
Operating models are shifting – employees seek
5 purpose-driven organizations; full time roles are being
replaced by gig work; nature of work is changing due to
technological advances

Page 4
The case for change
IA may not be able to keep up with the pace of change in the business leaving a risk coverage gap
Change readiness and competencies to
manage new world

Risk gap
2000s Next 10 years
Today

Internal audit Business

management

Page 5 Does a disrupted Internal Audit (IA) function mean a stronger strategic partner?
What will the IA mandate be?
The IA mandate does not need to change but it will evolve

IA will be highly connected, proactive and forward

looking in setting its priorities in response to
$ market disruptions

IA will extend beyond its traditional assurance

provider-role and become a strategic and
valued advisor

Assurance will broaden to: challenging the entire

risk framework and accounting for upside and
outside in addition to downside risks

Page 6 Does a disrupted Internal Audit (IA) function mean a stronger strategic partner?
What will the IA mandate be?
The mandate does not need to change but there will be a better balancing of focus

Proactive
Anticipative monitor Business counselor
► Focus on future topics (e.g., missing controls, policies ► Focus on strategic topics and actively engaged in strategic
and procedures) discussions and problem solving
► Future impact of recommendations ► Anticipating the future/industry trends and the impact on the
► Anticipating how the business model is changing business
Analytics and robotics: ► Fostering change and best practice development
and sharing
► Predictive and real time
Analytics and robotics:
Strategic view
► Prescriptive and trends

Strategic and Innovative view

Policing Partner
Assurance factory Change agent
► Focus on non-negotiable assurance and base level of trust and ► Focus on trends on why things fail systematically and audit against
current/past topics “unknown” rules
► Current impact of recommendations ► Deep dive in root-cause/and internal best practices for
► Raising awareness on current/past topics recommendations
Analytics and robotics: ► Initiating change
► Descriptive and internal data driven Analytics and robotics:
► Descriptive and internal/external data driven
Current view
Current and change view

Reactive

Page 7 Does a disrupted Internal Audit (IA) function mean a stronger strategic partner?
What is our vision?

Digital Excellence: Disruptive Innovations:

Efficient analytics Predictive and
delivery
Optimized operations
The fully prescriptive analytics
IA for emerging risks
through further digitalized
process
standardization function

Revolutionize IA approach:
Flexible work model enable by technology
Enhanced internal collaboration

Page 8
 How will IA work in
the future?

Page 99
Page 10/14/21 Presentation title
 Future of IA
How will IA work in the future?
Have an agile and dynamic operating model enabled by technology and a flexible workforce

Current Future
Baseline Assurance and shift to become Change
WHAT? Baseline Assurance Agent, Anticipative Monitor and Business
Counselor

Continuous
Annual Audit plan
WHEN? Reactive to events
Flexible Audit Plan
Proactive prior to events

Anywhere
WHERE? On-site only
Everywhere

Manual Automated
HOW? Full population
Samples

IA Function incl.
WHO? IA Function Robots, Guest auditors, Talents,
Subject Matter Resources

We are driving the Internal Audit agenda together with our clients –
Focus on innovation and re-defining Internal Audit strategy and operating model for the digital age.
Page 10
 EY Virtual Internal Auditor
High level functional coverage

Risk Monitoring Flexible Audit Response Model (FARM)

EYVIA Setup Analytics Dashboard Advanced Analytics

IA Function Test results Unstructured Data
Audit Universe Dashboards (visualizations) Machine Learning
Process Universe Benchmarking data Robotics
Risk Universe Results Interpetation Artificial Intelligence
Application configuration
Plan Audit Response Fieldwork Audit Reporting Follow-up

Data Ingestion Flexible risk coverage Interviews One click

Alerts
Extensive audit objects Reviews Multi level
Continuous Ingestion Notifications
Resource allocation Findings Continuous
Offline Extraction My tasks
Long term planning Recommendations Video
Manual Templates

Inquiry
Canned Tests Workbench Webforms
Standard processes & risks Ad-hoc tests eMail notifications
Predefined data elements Data analysis
EY Intellectual property

Page 11
 What is the impact of the fully digitalized IA function?

• Significant extension of Risk Coverage

Enablement (breadth and depth)
• Full population testing
• Full root cause analysis

• Mix of continuous Risk Monitoring and

periodical Risk Assessment
Change of IA • Combination of (traditional) backward looking
approach approach, real-time and predictive analysis
• Mix of reactive and proactive audit response

• Become morerelevant through deeper insights

Increase of • More time to focus on risks and topics beyond
relevance todays scope

Page 12
Video
 All processes All transactions

Significant
Automation
EY VIA All locations

Full Risk coverage Increased Relevance

Your questions?
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