Robotics process automation (RPA) has become a competent way to automate labor-concentrated and recurring tasks across a range of business functions, including finance and accounting, legal, HR, commercial loan operations and, progressively, internal audit (IA).
As many internal audit processes are manual and recurring in nature (such as validating the elimination of system access rights for terminated customers or change management testing), needing major time to execute and stay consistent year-over-year, IA departments are starting to comprehend that RPA can craft their work increasingly effective and advance audit coverage.
Though RPA is commonly acknowledged to provide organizations the opportunity to attain major efficiency-driven cost savings, there are some regions within IA where it may not be the right solution given factors for example data privacy requirements or lack of enough business significance being created. But, executing bots where considerate and suitable can make dissimilarity across many IA departments.
How RPA Impels Value In Internal Audit
We have seen that internal audit can employ their knowledge of RPA to help in recognizing opportunities to embed automation-facilitated controls in the business and/or apply RPA to their own audit processes in the following ways:
Sampling danger – While executing an audit, data samples are frequently selected as it is not handy to manually test a full population of large data sets. Selecting samples, those are representative of the population, indicates that internal auditors test only a small percentage of control executions manually. Through automated testing, internal audit can develop the audit exposure by testing full populations of data rather than sampling, and management can attain more confidence that controls are intended and operating efficiently.
Audit Frequency – Because of the risk-based approach pursued by IA departments (and the time-responsive nature of some internal audit work), some business areas may not be checked every year, and occasionally only every two or three years.
Annual Risk appraisal – Today, several IA departments still pursue the usual method of executing an annual risk evaluation as the precursor to the yearly audit plan. This needs assembling data points from each audit area and allotting a risk-based score to each. This can be a time-consuming assignment, requiring the gathering of data from every audit area across the enterprise.
Audit Committee Reporting – A big part of management time in review is spent in reporting. Audit reports go to the chief audit executive (CAE) and forward to the audit board. Usually, they are long, verbose reports that take major time to finish
RPA could help IA leadership in automating reporting and dashboarding exercises, including populating audit committee and management report layouts.
Key thoughts For RPA execution: Before And During execution
- Evidently describe the vision and approach for automation. Search for processes that:
- Have an evidently definable Return on Investment (ROI)
- Relate to an area of major business risk to the organization
- Have dependable and excellent data inputs
- Are rules-based and stay comparatively steady period over period
- Are labor-concentrated and subject to human error
- Take place frequently and are generally ineffective
- Classify roles, responsibilities and structures for recognizing which tests and procedures are the most talented candidates for automation.
- Grow processes for supporting designs and operation methods, and extend standardized documentation. Don’t accept existing manual processes are compliant with policy or are ready to be automated. There may be some inefficiency to eliminate before launching RPA.
- Associate with your security team before time, recognize authentication mechanisms for the bots and expand security policies for privacy and data safety.
- Set up apparent change management processes and controls.
- Continuously test and monitor.
- Train your staff.
- Question whether RPA is the best answer for making a process more creative. Could building an API (application programming interface) into a legacy system be more cost-efficient than acquating RPA in order to bring efficiencies?
Major Considerations For RPA execution: After execution
- Think about metrics and how to calculate them. How are you going to calculate ROI over the life of the bot(s)?
- After successful execution and rollout, think developing a robotic center of excellence (CoE) for improved governance.
- Plan your strategy if the bots are not running as easily as usual.
Generally, internal audit functions are assessing the rising possibilities from RPA operations across the organization and how the technology can be leveraged to advance competence and efficiency within their own activities. Make sure strong program leadership and don’t underestimate the requirement for strong governance on your journey to RPA achievement.