About the Event

In this public lecture, response to digital risks in the public sector will be discussed briefly from the internal audit perspective. Continuous auditing and continuous monitoring (CA/CM) are perceived as a vision rather than a certain technological tool and in that sense; CA/CM is yet in its beginnings across the world. Today, the technical skills of the audit team are much higher, and increased business intelligence capabilities for analyzing data improved the audit tools and techniques. The major theme of this transformation can be summarized as follows: better audit quality, smarter audit approaches through data analytics, improved audit reporting, increased level of integrity and enhanced internal control infrastructure. Hence, internal auditors beyond their traditional roles, simply become the trusted data analyzers.

It is a fact that audit services in the sense realized today have shown significant developments since the beginning of 20th century. Thus, the traditional audit approach is no longer sufficient and special attention is paid to risk-based auditing activities. After the global financial crisis that has emerged in 2008, the entire infrastructure of audit, internal control and risk management systems has started to be questioned. The most distinctive feature of this crisis is that it has an impact on all countries starting from developed countries with high corporate maturity levels. Therefore, the priorities of supervisory authorities have changed, and they have started to implement a series of standards and regulations for the effective supervision and protection of all institutions. Compliance with the regulations in the public sector has become the top priority of all government institutions and organizations, and all affiliates and organizations affiliated to them. As a result, the tendency towards information technologies in the public sector has started to increase rapidly. The need for more flexible and agile audit approaches based on data analytics, and remote audit techniques has started to increase with the help of digital transformation in the public sector.

The agile auditing philosophy is different in the following ways. By applying an agile method, the productivity and added value of the Internal Audit Function (IAF) can be improved and related costs can be reduced. Agile auditing approach leads to continuous coordination with the auditees based on providing timely data analysis and executive reports, which are prepared by relying on CA/CM tools and techniques. In this way, the auditors will be more flexible with the mindset and method that an IAF uses to focus on the needs of stakeholders.

Many IT and IS techniques and technologies have to be incorporated into Auditing process to deal with complexities resulting from amount of data, need for fast decision making, number of stakeholders involved, visibility and accountability needs. Some of them are big data and data analytics; cloud technologies; social media; mobile technologies; artificial intelligence and machine learning. These are all becoming essential parts of auditing function and they should be incorporated into auditing process for better performance.