Internal Audit: Key thematic areas to consider in 2024

As featured on BusinessMirror:  Internal Audit: Key thematic areas to consider in 2024

Internal Audit functions must remain agile when developing their 2024 audit plans as their organizations face evolving challenges.

The uncertainty and disruption that was seen across the global business landscape last year continues to intensify pressure on the risk and control environment. Most organizations continue to suffer supply chain uncertainties, impacts of inflation and geopolitical uncertainties.

To support Heads of Internal Audit, we have identified and compiled the key thematic areas and related risks which Internal Audit functions should consider. The thematic areas below include both emerging and established risks which Internal Audit should consider when preparing its agile annual Internal Audit plan for 2024.

While the below is not an exhaustive list of thematic areas, these can serve as a starting point from which the Internal Audit function can leverage when assessing the organization’s risk profile and control environment throughout 2024. We have provided further information on each thematic area overleaf.

Recent years have been described as the age of the ‘polycrisis’. The term coined by the World Economic Forum (WEF) describes the interaction between the COVID-19 pandemic, the war in Ukraine, as well as, the energy, cost-of-living and climate crises.

The elevated levels of economic, geopolitical, and environmental uncertainty are creating new risks, threats and opportunities at an unprecedented rate and impacting the economy in many ways, including disruptions in supply chains, monetary policy adjustments and stakeholder expectations. This means that organizations’ risk management processes and functions need to be more prognostic and dynamic than ever before in order to navigate these challenges. 

Given the current business landscape, operational excellence is critical for success in 2024. In light of the current external pressures, organizations must ensure that they are able to efficiently adapt, capitalize new opportunities and emerge stronger, regardless of the nature of the disruption.

As previously discussed, external environmental factors highlight the importance of attaining and sustaining operational excellence in a continuously evolving business landscape. The convergence of new technologies, the impact of the 'polycrisis’, and shifts in employee and consumer expectations have created a dynamic environment necessitating agility and adaptability. This involves enhancing internal processes, minimizing waste and optimizing productivity. Attaining operational excellence will allow organizations to effectively respond to external challenges.

Technology is an integral part to the success of running an organization. Technology is constantly changing at a rapid pace and in 2023 we have seen an increase in the use of AI technology.

Another major technological advancement in recent years is the integration of Cloud Computing which will continue to increase further in the future. The proliferation of digital business models and the growing dependence on technology within organizations have given rise to the amounts of personal data being handled by organizations as part of their operations. This increases the risk of data privacy breaches and also increases the likelihood of cyber attacks. Organizations need to implement robust IT security to mitigate these risks.

There is constant and complex regulatory change in areas such as technology, disruption, ESG and data privacy for organizations regardless of what industry they are operating in. The complexity and pace of these regulatory changes puts pressure on executive management, and they must adopt an agile approach to ensure compliance to new regulation.

In order to effectively evaluate an organizations compliance with regulation, the Internal Audit function must gain a comprehensive understanding of the existing regulatory landscape for the Industry the organization currently operates in.