W HIT E PA P ER

Agile Audit for a

Post-Covid World
Enabling internal audit to assess key risks,
redefine priorities and prepare for the future.
Pentana | WHITE PAPER

The world today is a very different place to the one we lived in just six months ago. Businesses of all sizes have had to
adapt and evolve to deal with the impact of COVID-19, which has caused massive disruption throughout every industry
and continues to change daily. Organisations are facing unprecedented challenges at an alarming rate and internal audit
functions have an important role to play to continue to provide critical assurance, help advise management and Board
members on the shifting risk and control landscape, and anticipate emerging risks.

As we look beyond the horizon, internal audit will be a vital resource to organisations that are looking at ways to optimise
their business for this new reality. It is well-documented that businesses that open first after a natural disaster are often
the ones that fare best in the long term1. However, the internal audit function will also need to innovate if it wants to
address the new and ever-changing risk exposures that a post-COVID world brings. In this white paper, we explore the
benefits of using ‘agile’ principles and methodologies to:

The impact of COVID-19 on operations and the overall economy could potentially last for months or even years; all
organisations have a difficult journey to make if they want to navigate this crisis and come out strong on the other side.
Emerging risks, by their nature, are unpredictable. Internal audit, with its unique skillset and positioning, must be the eyes
and ears of management, helping them meet challenges as they arise, protecting and enabling the business with up-to-
date, relevant information so that business-critical decisions can be made effectively. Agile auditing may have been in the
‘something to consider’ box of many audit professionals for a while, but it is now imperative that all audit departments
become more agile; adopting techniques, behaviours and ways of thinking that will generate greater stakeholder
engagement, faster audit cycle times, and more insightful reporting.

The short-term and long-term impact of COVID-19 is ambiguous and uncertain. By embracing the flexibility of agile
auditing, internal audit teams can help their organisations emerge from this crisis stronger than ever and empower the
internal audit function to be the torchbearers of innovative thinking.

1 In the Face of the Coronavirus, Internal Auditors Must Do More Than Don Masks: Richard Chambers, iaonline.theiia.org, March 2020

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 Agile (adj.) 1: marked by ready ability to move with quick easy grace

2: having a quick, resourceful, and adaptable character

- Merriam-Webster Dictionary

The Agile Revolution

Agile methodology stems from software development in the early-2000s. It was presented as an
alternative to the traditional ‘Waterfall’ method of development, which many perceived to be too
rigid, time consuming and unfit for purpose.

In an effort to keep up with new technologies and a fast-changing market, Agile was born. It
follows a set of principles laid out in a 2001 creation dubbed the ‘Agile Manifesto’, and has gone
on to influence a number of industries that have adopted the same framework for planning and
project delivery.

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What is agile auditing?
The term ‘agile auditing’ simply means an alternative delivery approach to traditional auditing. Agile auditing delivers an
audit through incremental, iterative work stages, known as sprints.

Agile auditing is built on the principle of continuous communication and collaboration, both among the audit team, but
more importantly with stakeholders.

Stakeholders are therefore aware of developments, behaviours, and observations far earlier and more frequently than
through a traditional audit approach.

In today’s world, this advantage is crucial – COVID-19 risks and priorities shift quickly, and management may get
consumed in executing plans to handle what they believe is occurring, losing sight of what has changed. The flexibility of
agile auditing means that internal audit is well-positioned to help management make this connection.

The basic elements of agile auditing include:

• Rapid planning processes and task prioritisation

• Sprints of two to four weeks to achieve specific goals
• Daily ‘scrum’ meetings of the entire team to check on progress and brainstorm solutions to emerging problems
• Regular pauses for reflection (sprint reviews) by the team on what has been achieved and for planning the next sprint

When compared to traditional methods of auditing, an agile audit looks like this:

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Pentana | WHITE PAPER

Even though it is a fairly new approach, agile audit practices are gaining momentum: 55% of internal audit groups are
either using agile internal audit methods or are considering adopting them1. Some of the key differences driving teams to
shift away from traditional auditing in favour of agile methods are2:

TRADITIONAL AGILE

Perfect communication after a long process Frequent communication during the process

Rigidly planned activities Quick, iterative activities

Comprehensive documentation Timely, relevant documentation and reporting

Established roles in a hierarchical system Empowered roles in a more flexible system

Following a mandated plan Responding to emerging needs

Auditing to internal audit resources Resourcing to audits and projects

Control of the audit process Transparency in the audit process

As organisations examine their COVID-19 business continuity plans and start moving from response to recovery, business
leaders will look to internal audit to guide them through strategic decisions that will prove resilient in this volatile,
uncertain, complex, and ambiguous environment. Agile auditing can be the ideal audit approach while COVID-19 risks and
priorities shift quickly; it not only increases the efficiency and effectiveness of internal audit work, but also fosters more
collaborative and business risk-focused relationships with stakeholders.
evolving needs:

Benefits of agile auditing

In Deloitte’s advisory report ‘Becoming agile: A guide to elevating internal audit’s performance and value’, the time
for change is now if internal audit wants to meet stakeholder demands of more efficient assurance, better advice on
processes and controls, greater anticipation of risks, deeper insights, and stronger points of view. The disruption brought
about by COVID-19 has only heightened this urgency, where unique challenges on how to work and respond to emerging
risks at a rapid pace has driven the need for efficiency over thoroughness, real-time over retrospective assurance, and
collaborative working on value-based outcomes over rigid, objective-driven activities.

Adopting an agile audit approach provides a variety of advantages that can support organisations’ evolving needs:

Greater flexibility
• Agile auditing lets you prioritise tasks based on latest risks and changing demands with a continuously updated backlog

Increased engagement
• Engagements are collaborative, meaning internal audit has deeper understanding of how COVID-19 is affecting client

Improved documentation
• Flexible reporting allows stakeholders to receive internal audit’s points of view in a near real-time basis with briefer,
timelier reports with fewer words and more visuals

Responsive to emerging risks

• Agile auditing allows auditors to recognise and respond to emerging risks and put controls in place much faster than
traditional audit methods

Incremental improvement
• More frequent reviews highlights areas for improvement much quicker than traditional methods

Valuable insights
• By streamlining the work and documentation, auditors’ attention is focused on the trends, risks, challenges, and
opportunities that can most impact the organization

1 Forging Internal Audit’s path to greater impact and influence: Deloitte, Global Chief Audit Executive research survey, 2018
2 Becoming Agile: Deloitte, A guide to elevating Internal Audit's performance and value, 2017

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Faster delivery cycles
• Sprints provide a process, structure, and cadence for the work without stressing resources

Real-time assurance
• With agile auditing, audit work is re-assessed every two to three weeks, meaning that results and insights are realized
more quickly, and feedback is faster

Some statistics over the last five years:

PwC – state Agile projects are 28% more successful than traditional methods and found they have
a positive impact on efficiency levels and overall stakeholder satisfaction.

Deloitte – state that benefits such as those mentioned above include clearer outcomes, less
documentation, accelerated delivery cycles, enhanced planning and valuable insights.

Barclays committed to a 100% agile internal audit method and have seen greater engagement
among the audit teams and a 10-20% reduction on time spent per audit.

Can technology facilitate agile auditing?

Technology has enabled a worldwide move to remote working since the COVID-19 pandemic struck, which has allowed
hundreds of millions of people to stay safe at home and remain productive in their work. Internal auditors have made
great use of video conferencing technology to conduct meetings and interviews with auditees and their team, but there
are many other unique challenges auditors face that technology can assist with, especially when working within an agile
environment.

Audit management software such as Ideagen’s Pentana Audit lets auditors streamline core internal audit processes and
deliver true strategic value in a central, connected online application. This helps to facilitate agile auditing through:

Iterative planning Better communication

Audit management software allows you to quickly and
easily plan iterative ‘sprints’, where priorities can be
reassessed and reassigned, and key areas of focus
re-evaluated whilst maintaining a ‘spine’ of obligatory
projects.
With software like Pentana Audit, auditors can provide
a constant line of communication with both the audit
team and stakeholders, enhancing collaboration and
ensuring the right outcomes are achieved to suit the
business’ needs.

Dynamic project management Improved reporting:

Audit management software promotes responsiveness
to unplanned issues, meaning that audit teams can
rapidly respond to evolving business needs.
By using audit management software, teams can
produce quick, bitesize reports presenting findings
at the end of a ‘sprint’, keeping stakeholders more
informed earlier and more frequently. They can also
facilitate the ongoing communication and engagement
with management and other stakeholders.

Accelerated delivery cycle Greater insight

With audit management software, you have the
capacity to segregate fieldwork and set precise
deadlines to tasks, meaning less time is spent on
documentation and more effort focussed on providing
assurance.
Using technology helps streamline audit work and
documentation, allowing agile audit teams to focus their
attention on the risks and opportunities that matter.

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 Digital Maturity: the impact of COVID-19

Organisations that are proactive in implementing digital strategies and technology solutions to transform
their business are prospering during this time at the expense of those that have yet to invest in systems
that allow them to operate digitally. This is because their processes are optimised with a high level of
automation and can be run from anywhere in the world.

A good example of this can be seen in the retail sector. Companies that operate almost exclusively through
online transactions are experiencing greater numbers of people shopping online and are not losing
revenue through the closure of physical stores.

Conclusion
Internal auditors face new and varied challenges in their position as 3rd Line of Defence. Now more than ever, the
importance of having an internal audit department that delivers impactful, up-to-date business intelligence to senior
management is paramount. Yet even before COVID-19 struck, the overarching theme for most internal audit groups has
been the need to change and to innovate to remain relevant in a rapidly evolving business environment. An Agile Internal
Audit approach provides methods that work to change both the mindset of internal auditors and their work processes.
As we have seen, no industry is immune to the effects of COVID-19. Internal audit departments of all sizes should
consider adopting agile techniques that will not only address the immediate issues, challenges, and risks affecting their
organisation’s ability to implement strategy and achieve their goals, but also provide a more permanent solution to the
long-term challenges facing the internal audit profession, and enable auditors to better align assurance with the dynamic
condition of a post-COVID world.

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 To discover how Ideagen’s world-leading internal audit
software Pentana Audit can help you embed agile
auditing principles and processes, contact us now.

+44 (0) 1629 699100

info@ideagen.com

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Ideagen Plc
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