Internal Audit Challenges in the Conditions of Digitalization of Business

Abstract

Significant effects of continuous technological development are reflected in the digitalization of the
economy which presupposes the usage of modern technologies and information to improve business processes,
achieve competitive advantage, generate new revenue flows and generate profits. Therefore, exploiting the potential of
digital technology for the purpose of creating additional value represents the imperative of every modern enterprise.
However, as it implies the introduction of new concepts and models of business and corporate governance, a
particularly high impact is expected from the so-called digital transformation of the functioning of internal audit. This
is because the internal audit takes a unique position in the corporate governance system from which it provides
information support to other management structures. As a provider of objective assurance about the adequacy and
effectiveness of the established management structure, on the one hand, and a catalyst of change through advising and
guiding work, on the other hand, internal audit faces numerous challenges. First, the introduction and implementation
of new technologies brings with it significant changes in the subject of the audit with the emergence of new risks that
need to be managed. Furthermore, the ability to effectively delegate the responsibilities delegated to it implies the
digitalization of the internal audit process itself, and consequently the necessity of mastering digital skills and
acquiring the appropriate competencies of internal auditors.
The aim of the authors of this paper is to point out the key aspects in which digitalization of business leads to new
challenges for internal audit, and then to emphasize the need and importance of adjusting the functioning of internal
audit to the digital business environment, because only with the technological improvement of the approach and
working methodology, the development of new skills of internal auditors and focusing on specific risks posed by new
technology, internal audit will not become an irrelevant function in an enterprise.