RETHINKING THE ROLE OF INTERNAL AUDIT IN BUSINESS: FROM A CONTROL FUNCTION TO VALUE CREATION

Abstract

The article examines the change in the functional role of internal audit, manifested in the transition from a predominantly control focus to participation in creating a value outcome for the organization. The rationale for choosing the research topic is due to the increasing demands from the board of directors and shareholders on the role of internal audit in ensuring the implementation of the strategic objectives of the organization in the context of digitalization, the increasing complexity of the risk system and the need to ensure the reliability of management accounting. The purpose of the work is to develop a theoretically sound scheme for such a transition, which will be measurable and will allow us to determine the relationship of the auditor with the elements of value. The methodology of the work included a generalized analysis of the literature on the topic over the past 5 years; a comparative analysis of industry analytical reports; an analysis of regulatory documents of professional standards. As a result of the generalization of sources, the author proposed a model of the maturity of the internal audit function, formed a tree of value drivers and developed the author’s index of the value contribution of internal audit, including a calculation formula and a conditional use case. The results of the study confirmed that the growth of consulting activities, the use of an analytical approach, the introduction of automation processes, and the harmonization of the audit program with the company’s strategic goals increase the degree of demand for this function for the enterprise. The calculation of the conditional indicator, along with sensitivity analysis, allows us to draw conclusions about the prospects for a diagnostic approach to choosing ways to improve. The proposed recommendations for implementing the model and building a route for increasing maturity can be used by organizations after adapting the estimated parameters to the internal context. The information reflected in the article has an application orientation for the heads of internal audit services, members of audit committees and corporate governance researchers.