Redesigning internal audit practices in South Africa understanding the influence of intelligent automation technology on internal audit practices

Abstract

Intelligent automation technology has shifted how knowledge workers in the service industry work, as many manual tasks can now be automated. In particular, the influence of intelligent automation technology, defined as robotic process analysis, artificial intelligence, and machine learning, was perceived to have changed how internal audit practices are performed. This perceived change would have resulted in redesigned business processes which would have shifted how customers are serviced, how services are provided, the way in which the internal audit function operates, as well as the organisational structure, use of technology and business information to create a competitive advantage. Therefore, from a South African context, the research aimed to understand how intelligent automation technology influenced the redesign of internal audit practices in South Africa, taking into consideration critical success factors and barriers experienced, with the purpose of being able to leverage change implementation and redesign practices for knowledge workers in the service industry. A qualitative, exploratory research methodology was used to gain insight into perceived changes in internal audit practices due to the influence of intelligent automation technology and the success factors and barriers experienced during the change. The study consisted of 16 semi-structured, in-depth interviews with Senior Managers and Chief Audit Executives from in-house internal audit functions as well as Director and Partner level internal audit professionals from professional service firms. The key finding of the research study indicated that due to the influence of intelligent automation technology, internal audit practices in South Africa have been slow to redesign business processes and, in some instances, have not fundamentally redesigned internal audit practices. The study provided insight into the business process redesign framework used to underpin this study, which revealed that although effective in providing consideration when implementing a change programme, the South African environment is unique and without adequate due diligence processes to evaluate the organisational, social and technology landscape of the business environment in which change is to be implemented, BPR will not be successful and as such internal audit practices have seen limited changes.