What is Agile Auditing?

The world around us is constantly changing, with new concepts and risks emerging. To deal with such dynamic issues, dynamic solutions are required. Traditionally, projects are planned and executed in a linear manner, but typical project management methods do not always cut it. This is where the agile approach comes in. Even though agile project management originated in software development, it can be useful for other environments including internal audit. 

Why Should you Implement Agile Auditing?  

The agile approach focuses on individuals and interactions rather than processes and tools. It emphasizes an iterative structure that provides flexibility, efficiency, and increased transparency. Due to its iterative nature, agile auditing allows for less upfront planning and greater flexibility when problems arise. Additionally, a flexible system employs a more collaborative approach to problem-solving, increasing transparency within an organization and with clients.  

Organizations face unpredictable market conditions, regulatory changes, and emerging risks. Internal audit functions utilize the principles of the agile approach, collaboration, and flexibility. As they provide more impactful insights and quicker reaction times, they become more anticipatory of risks and incorporate a more risk-based approach. 

Auditing Methodology  

Various methods are used in auditing, and most share basic characteristics. 

Traditional Approach: Understanding an Audit Backlog 

An audit backlog is created that contains a listing of audits or tasks. These audits and tasks are prioritized by organizational risk. The log is continuously updated based on the organization's needs. Audit teams start at the top of the audit backlog and work their way down until all audits have been completed. The top of the log is the most important and relevant at that specific time.  

After an audit is selected, it is broken into small increments called stories. Stories are tasks that can be achieved within sprints, time-based intervals where audit work is conducted. These provide a process, structure, and cadence to the audit work schedule, typically lasting one to two weeks. At the end of each sprint, completed work is demonstrated to the organization’s stakeholders within a “stakeholder touchpoint.”  

As the audit work is being conducted, a “scrum master” or audit manager serves as the team facilitator and oversees that the audit process is followed and completed on time and within budget. This audit structure allows for flexible risk-based procedures to assist internal audit functions. 

 Understand Agile Internal Auditing 

Agile internal auditing defines a shorter path to more insightful results. With repetitive one-to-two-week sprint touchpoints, organizations engage with stakeholders earlier and more frequently. The audit backlog allows for the ability to employ a more risk-based approach and empowers internal audit teams and organization stakeholders to decide what to do, how much to do, and when to do it. Agile auditing is relevant and impactful, addressing the challenges internal audit functions face today. 

Key Considerations When Choosing Your Audit Approach 

It should be noted that the agile approach may not be the best method in every situation. When considering using the traditional approach versus the agile approach, one should determine the following: 

• Are the project requirements clear? Agile is the better choice if the project’s requirements are likely to change or are imprecise. The traditional method may be preferable if the project is well-defined and predictable. 

• Is the project prone to undesirable threats? The rigid nature of the traditional approach makes it an undesirable choice. In contrast, the flexible, task-based approach of the agile method allows unforeseen risks to be handled without derailing the entire project. 

• What is the size of the team? The agile approach works best in smaller groups of experienced team members focused on collaboration and flexibility. The traditional method is better suited for large and multifaceted teams. 

To find out which methodology is right for you, contact an EisnerAmper audit advisor today.