After a 3-year break, IIA Croatia (HIIR) continues the successful practice of organizing conferences and organizes the postponed 12th International Conference of Internal Auditors in its usual spring term - "Internal Audit in Challenging Times", in Umag from March 22-24, 2023.

In the previous period, we have learned that we can quickly adapt to new conditions and circumstances and function in previously unimaginable conditions, organize the functioning of the internal audit from home. Some adapted to the new conditions better, some more slowly, but we managed to adapt. Today, internal audit faces many challenges, not only those related to working conditions during the corona pandemic.

When we look back at the end of the 20th century, we see that the world of internal auditing was fundamentally different. The typical focus of audit teams has been to complete the traditional audit cycle of specific financial and operational areas. The approach was predictable and procedures barely changed between cycles. Internal auditors were perceived by management as a "necessary evil", hard-working, detail-oriented and responsible professionals, obsessed with issues that were not expected to contribute significantly to organizational goals.

Today, at the beginning of the third decade of the 21st century, organizations are faced with the development of new strategic, reputational, operational, financial, regulatory and cyber risks. The world has entered a new industrial revolution where technologies, digitization and artificial intelligence are dramatically changing the business landscape. Changes are faster and more frequent.

And while organizations face a technologically managed, innovation-oriented and uncertain future, where is the internal audit? Very often, despite constant efforts to satisfy the growing list of demands, the answer is: it is slowly catching up.

What is often missing is the recognition that organizations and the business environment have changed in ways that require innovation. Without the application of new approaches and tools, the internal audit function lags behind strategic and technological development, unable to meet the needs of stakeholders, with a reduced ability to face new risks. Accepting new approaches and innovations in a very short time, positions internal audit as a real partner, in which it anticipates risks and then responds effectively to the needs of stakeholders. The need for education and development of internal auditors existed before, however, now it is much faster and more complex.

Although the emphasis and delivery of the internal audit service must be updated, its core purpose remains much the same: to provide assurance and advice. However, the most successful internal audit functions will also, by anticipating and using proactive assurance, help organizations keep pace with emerging risks. But to achieve this, internal audit must free up its time and resources to focus on development and innovation. Internal audit must adopt a new vision of its role and operations, in order to maintain the relevance of assurance and consulting services for organizations.

Technology is a key factor influencing the future of the internal audit profession. The latest research shows that more than half of internal audit leaders are concerned that a lack of technology adoption will mean the value of internal audit is diminished. On the other hand, three quarters of those who use advanced technologies significantly contribute to the added value of the organization.

At the moment, the main obstacles to faster progress of internal audit through innovation are inherited limitations and insufficient budgets. Audit leaders, management and audit committees must work to change the way of thinking in their functions and organizations. Internal audit must adapt to new methods made possible by new technologies and new ways of working.

Internal auditors must develop the commitment and courage to drive innovative change, within themselves and within their internal audit departments. Innovations such as automated assurance provision, advanced analytical methods, use of artificial intelligence, agile internal audit, dynamic planning, comprehensive reporting, etc. show that the future of internal audit is becoming increasingly clear, and the time for change is now.

The first step on that path is certainly participation in this year's IIA Croatia (HIIR) conference. I am sure that you will find interesting and useful topics in the Conference Program, since the lecturers are long-term internal audit practitioners from Croatia, renowned foreign lecturers in the field of communication, colleagues from Slovenia, Serbia and Macedonia, representatives of the academic community, external auditors and representatives of regulators.

Join us to find the answer of how to tackle the challenges ahead and prepare ourselves for the future ahead.

 

Senka Presečan

IIA Croatia, President