Internal audit potential for

not-for-profit

organizations

Colin is a Senior Consultant in BerryDunn’s Government Consulting Group with experience in communicating and executing strategic plans, coordinating membership development for various groups, and managing finance activities. He has worked on a wide range of projects with a focus on programmatic audit, forensic audit, financial process improvement, invoice review, and data analysis. He is a Certified Associate in Project Management and is currently working toward his Project Management Professional® certification.

More and more emphasis is being put on cybersecurity by companies of all sizes. Whether it’s the news headlines of notable IT incidents, greater emphasis on the value of data, or the monetization of certain types of attacks, an increasing amount of energy and money is going towards security. Security has the attention of leadership and the board and it is not going away. One of the biggest risks to and vulnerabilities of any organization’s security continues to be its people. Innovative approaches and new technology can reduce risk but they still don’t prevent the damage that can be inflicted by an employee simply opening an attachment or following a link. This is more likely to happen than you may think.

Technology also doesn’t prepare a management team for how to handle the IT response, communication effort, and workforce management required during and after an event. Technology doesn’t lessen the operational impact that your organization will feel when, not if, you experience an event.

So let’s examine the human and operational side of cybersecurity. Below are three factors you should address to reduce risk and prepare your organization for an event:

1. People: Create and maintain a vigilant workforce
   Ask yourself, “How prepared is our workforce when it comes to security threats and protecting our data? How likely would it be for one of our team members to click on a link or open an attachment that appear to be from our CFO? Would our team members look closely enough at the email address and notice that the organization name is different by one letter?”
    

   According to the 2016 Verizon Data Breach Report, 30% of phishing messages were opened by the target across all campaigns and 12% went on to click on the attachment or link.

   Phishing email attacks directed at your company through your team range from very obvious to extremely believable. Some attempts are sent widely and are looking for just one person to click, while others are extremely targeted and deliberate. In either case, it is vital that each employee takes enough time to realize that the email request is unusual. Perhaps there are strange typos in the request or it is odd the CFO is emailing while on vacation. That moment your employees take to pause and decide whether to click on the link/attachment could mean the difference between experiencing an event or not.
   
   So how do you create and cultivate this type of thought process in your workforce? Lots of education and awareness efforts. This goes beyond just an annual in-service training on HIPAA. It may include education sessions, emails with tips and tricks, posters describing the risk, and also exercises to test your workforce against phishing and security exploits. It also takes leadership embracing security as a strategic imperative and leading the organization to take it seriously. Once you have these efforts in place, you can create culture change to build and maintain an environment where an employee is not embarrassed to check with the CFO’s office to see if they really did send an email from Bora Bora.

2. Plan: Implement a disaster recovery and incident response plan 
   Through the years, disaster recovery plans have been the usual response. Mostly, the emphasis has been on recovering data after a non-security IT event, often discussed in context of a fire, power loss, or hardware failure. Increasingly, cyber-attacks are creeping into the forefront of planning efforts. The challenge with cyber-events is that they are murkier to understand – and harder for leadership – to assist with.
   
   It’s easier to understand the concept of a fire destroying your server room and the plan entailing acquiring new equipment, recovering data from backup, restoring operations, having good downtime procedures, and communicating the restoration efforts along the way. What is much more challenging is if the event begins with a suspicion by employees, customers, or vendors who believe their data has been stolen without any conclusive information that your company is the originating point of the data loss. How do you take action if you know very little about the situation? What do you communicate if you are not sure what to say? It is this level of uncertainty that makes it so difficult. Do you have a plan in place for how to respond to an incident? Here are some questions to consider:
    
   1. How will we communicate internally with our staff about the incident?
   2. How will we communicate with our clients? Our patients? Our community?
   3. When should we call our insurance company? Our attorney?
   4. Is reception prepared to describe what is going on if someone visits our office?
   5. Do we have the technical expertise to diagnose the issue?
   6. Do we have set protocols in place for when to bring our systems off-line and are our downtime procedures ready to use?
   7. When the press gets wind of the situation, who will communicate with them and what will we share?
   8. If our telephone system and network is taken offline, how we will we communicate with our leadership team and workforce?

By starting to ask these questions, you can ascertain how ready you may, or may not be, for a cyber-attack when it comes.

3. Practice: Prepare your team with table top exercises  
   Given the complexity and diversity of the threats people are encountering today, no single written plan can account for all of the possible combinations of cyber-attacks. A plan can give guidance, set communication protocols, and structure your approach to your response. But by conducting exercises against hypothetical situations, you can test your plan, identify weaknesses in the plan, and also provide your leadership team with insight and experience – before it counts.
   
   A table top exercise entails one team member (perhaps from IT or from an outside firm) coming up with a hypothetical situation and a series of facts and clues about the situation that are given to your leadership team over time. Your team then implements the existing plans to respond to the incident and make decisions. There are no right or wrong answers in this scenario. Rather, the goal is to practice the decision-making and response process to determine where improvements are needed.
   
   Maybe you run an exercise and realize that you have not communicated to your staff that no mention of the event should be shared by employees on social media. Maybe the exercise makes you realize that the network administrator who is on vacation at the time is the only one who knows how to log onto the firewall. You might identify specific gaps that are lacking in your cybersecurity coverage. There is much to learn that can help you prepare for the real thing.

As you know, there are many different threats and risks facing organizations. Some are from inside an organization while others come from outside. Simply throwing additional technology at the problem will not sufficiently address the risks. While your people continue to be one of the biggest threats, they can also be one of your biggest assets, in both preventing issues from occurring and then responding quickly and appropriately when they do. Remember focus on your People, Your Plan, and Your Practice.

Read this if you are a police executive, city/county administrator, or elected government official, responsible for a law enforcement agency. 

“We need more cops!”  

Do your patrol officers complain about being short-staffed or too busy, or that they are constantly running from call to call? Does your agency struggle with backed-up calls for service (CFS) or lengthy response times? Do patrol staff regularly find themselves responding to another patrol area to handle a CFS because the assigned officer is busy on another call? Are patrol officers denied leave time or training opportunities because of staffing issues? Does the agency routinely use overtime to cover predictable shift vacancies for vacations, holidays, or training? 

If one or more of these concerns sound familiar, you may need additional patrol resources, as staffing levels are often a key factor in personnel deployment challenges. Flaws in the patrol schedule design may also be responsible, as they commonly contribute to reduced efficiency and optimal performance, and design issues may be partially responsible for some of these challenges, regardless of authorized staffing levels.
 
With community expectations at an all-time high, and resource allocations remaining relatively flat, many agencies have growing concerns about managing increasing service volumes while controlling quality and building/maintaining public trust and confidence. Amid these concerns, agencies struggle with designing work schedules that efficiently and optimally deploy available patrol resources, as patrol staff become increasingly frustrated at what they consider a lack of staff.

The path to resolving inefficiencies in your patrol work schedule and optimizing the effective deployment of patrol personnel requires thoughtful consideration of several overarching goals:

• Reducing or eliminating predictable overtime
• Eliminating peaks and valleys in staffing due to scheduled leave
• Ensuring appropriate staffing levels in all patrol zones or beats
• Providing sufficient staff to manage multiple and priority CFS in patrol zones or beats
• Satisfying both operational and staff needs, including helping to ensure a proper work/life balance and equitable workloads for patrol staff

Scheduling alternatives

One common design issue that presents an ongoing challenge for agencies is the continued use of traditional, balanced work schedules, which spread officer work hours equally over the year. Balanced schedules rely on over-scheduling and overtime to manage personnel allocation and leave needs and, by design, are very rigid. Balanced work schedules have been used for a very long time, not because they’re most efficient, but because they’re common, familiar, and easily understood―and because patrol staff are comfortable with them (and typically reluctant to change). However, short schedules offer a proven alternative to balanced patrol work schedules, and when presented with the benefits of an alternative work schedule design (e.g., increased access to back-up, ease of receiving time off or training, consistency in staffing, less mandatory overtime), many patrol staff are eager to change.

Short schedules

Short schedules involve a more contemporary design that includes a flexible approach that focuses on a more adaptive process of allocating personnel where and when they are needed. They are significantly more efficient than balanced schedules and, when functioning properly, they can dramatically improve personnel deployments, bring continuity to daily staffing, and reduce overtime, among other operational benefits. Given the current climate, most agencies are unlikely to receive substantial increases in personnel allocations. If that is true of your agency, it may be time to explore the benefits of alternative patrol work schedules.

A tool you can use

Finding scheduling strategies that work in this climate requires an intentional approach, customized to your agency’s characteristics (e.g., staffing levels, geographic factors, crime rates, zone/beat design, contract/labor rules). To help guide you through this process, BerryDunn has developed a free tool for evaluating patrol schedules. Click here to measure your patrol schedule against key design components and considerations.

If you are curious about alternative patrol work schedules, our dedicated justice and public Safety consultants are available to discuss your organization’s needs.

Who has the time or resources to keep tabs on everything that everyone in an organization does? No one. Therefore, you naturally need to trust (at least on a certain level) the actions and motives of various personnel. At the top of your “trust level” are privileged users—such as system and network administrators and developers—who keep vital systems, applications, and hardware up and running. Yet, according to the 2019 Centrify Privileged Access Management in the Modern Threatscape survey, 74% of data breaches occurred using privileged accounts. The survey also revealed that of the organizations responding:

• 52% do not use password vaulting—password vaulting can help privileged users keep track of long, complex passwords for multiple accounts in an encrypted storage vault.
• 65% still share the use of root and other privileged access—when the use of root accounts is required, users should invoke commands to inherent the privileges of the account (SUDO) without actually using the account. This ensures “who” used the account can be tracked.
• Only 21% have implemented multi-factor authentication—the obvious benefit of multi-factor authentication is to enhance the security of authenticating users, but also in many sectors it is becoming a compliance requirement.
• Only 47% have implemented complete auditing and monitoring—thorough auditing and monitoring is vital to securing privileged accounts.

So how does one even begin to trust privileged accounts in today’s environment? 

1. Start with an inventory

To best manage and monitor your privileged accounts, start by finding and cataloguing all assets (servers, applications, databases, network devices, etc.) within the organization. This will be beneficial in all areas of information security such as asset management, change control and software inventory tracking. Next, inventory all users of each asset and ensure that privileged user accounts:

• Require privileges granted be based on roles and responsibilities
• Require strong and complex passwords (exceeding those of normal users)
• Have passwords that expire often (30 days recommended)
• Implement multi-factor authentication
• Are not shared with others and are not used for normal activity (the user of the privileged account should have a separate account for non-privileged or non-administrative activities)

If the account is only required for a service or application, disable the account’s ability to login from the server console and from across the network

2. Monitor—then monitor some more

The next step is to monitor the use of the identified privileged accounts. Enable event logging on all systems and aggregate to a log monitoring system or a Security Information and Event Management (SIEM) system that alerts in real time when privileged accounts are active. Configure the system to alert you when privileged accounts access sensitive data or alter database structure. Report any changes to device configurations, file structure, code, and executable programs. If these changes do not correlate to an approved change request, treat them as incidents and investigate.  

Consider software that analyzes user behavior and identifies deviations from normal activity. Privileged accounts that are accessing data or systems not part of their normal routine could be the indication of malicious activity or a database attack from a compromised privileged account. 

3. Secure the event logs

Finally, ensure that none of your privileged accounts have access to the logs being used for monitoring, nor have the ability to alter or delete those logs. In addition to real time monitoring and alerting, the log management system should have the ability to produce reports for periodic review by information security staff. The reports should also be archived for forensic purposes in the event of a breach or compromise.

Gain further assistance (and peace of mind) 

BerryDunn understands how privileged accounts should be monitored and audited. We can help your organization assess your current event management process and make recommendations if improvements are needed. Contact our team.

“The world is one big data problem,” says MIT scientist and visionary Andrew McAfee.

That’s a daunting (though hardly surprising) quote for many in data-rich sectors, including higher education. Yet blaming data is like blaming air for a malfunctioning wind turbine. Data is a valuable asset that can make your institution move.

To many of us, however, data remains a four-letter word. The real culprit behind the perceived data problem is our handling and perception of data and the role it can play in our success—that is, the relegating of data to a select, responsible few, who are usually separated into hardened silos. For example, a common assumption in higher education is that the IT team can handle it. Not so. Data needs to be viewed as an institutional asset, consumed by many and used by the institution for the strategic purposes of student success, scholarship, and more.

The first step in addressing your “big” data problem? Data governance.

What is data governance?

There are various definitions, but the one we use with our clients is “the ongoing and evolutionary process driven by leaders to establish principles, policies, business rules, and metrics for data sharing.”

Please note that the phrase “IT” does not appear anywhere in this definition.

Why is data governance necessary? For many reasons, including:

1. Data governance enables analytics. Without data governance, it’s difficult to gain value from analytics initiatives which will produce inconsistent results. A critical first step in any data analytics initiative is to make sure that definitions are widely accepted and standards have been established. This step allows decision makers to have confidence in the data being analyzed to describe, predict, and improve operations.
    
2. Data governance strengthens privacy, security, and compliance. Compliance requirements for both public and private institutions constantly evolve. The more data-reliant your world becomes, the more protected your data needs to be. If an organization does not implement security practices as part of its data governance framework, it becomes easier to fall out of compliance. 
    
3. Data governance supports agility. How many times have reports for basic information (part-time faculty or student FTEs per semester, for example) been requested, reviewed, and returned for further clarification or correction? And that’s just within your department! Now add multiple requests from the perspective of different departments, and you’re surely going through multiple iterations to create that report. That takes time and effort. By strengthening your data governance framework, you can streamline reporting processes by increasing the level of trust you have in the information you are seeking. Understanding the value of data governance is the easy part/ The real trick is implementing a sustainable data governance framework that recognizes that data is an institutional asset and not just a four-letter word.

Stay tuned for part two of this blog series: The how of data governance in higher education. In the meantime, reach out to me if you would like to discuss additional data governance benefits for your institution.

Your government agency just signed the contract to purchase and implement a shiny new commercial off-the-shelf (COTS) software to replace your aging legacy software. The project plan and schedule are set; the vendor is ready to begin configuration and customization tasks; and your team is eager to start the implementation process.

You are, in a word, optimistic. But here comes the next phase of the project—the gap analysis, in which your project team and the vendor’s project team test the new software to see how well it fulfills your requirements. Spending sufficient time and energy on the gap analysis increases the likelihood the resulting software is configured to support the desired workflows and processes of the agency, while taking advantage of the software’s features and benefits. Yet this phase can be stressful because it will identify some gaps between what you want and what the software can provide.

While some of the gaps may be resolved by simple adjustments to software configuration, others may not—and can result in major issues impacting project scope, schedule, and/or cost. How do you resolve these major gaps?

Multiple Methods. Don’t let your optimism die on the vine. There are, in fact, multiple ways to address major gaps to keep you on schedule and on budget. They include:

Documenting a change request through a formal change control process. This will likely result in the vendor documenting the results of the new project scope. This, in turn, may impact the project’s schedule and cost. It promotes best practice by formally documenting approved changes to project scope, including any impact on schedule and cost. However, the change request process may take longer than you may originally anticipate, as it includes:

Collaborating with the vendor on a solution that fits within the confines of the selected software. With no actual customization required, this may result in a functionality compromise, and may also involve compromise by the project team and the vendor. However, it does not require a formal process to document and approve a change in scope, schedule or cost, since there are no impacts on these triple constraints.

Collaborating with the vendor and internal project stakeholders to redefine business processes. This may or may not result in a change request. It also promotes best practice, as the business processes become more efficient, and are supported by the selected software product without customization. This will require a focus on organizational change management, since the resulting processes are not reflective of the “way things are done today.”

Accepting the gap—and doing nothing. If the gap has little or no impact on business process efficiency or effectiveness, this method is likely the least impactful on the project, as there are no changes to scope, schedule, or cost. However, the concept of “doing nothing” to address the gap may have the same organizational change ramifications as the previous point.

Of course, there are other methods for addressing major software gaps. The BerryDunn team brings experience in facilitating discussions with agencies and their vendors to discuss gaps, their root causes, and possible solutions. We leverage a combination of project management discipline, organizational change management qualifications, and deep expertise to help clients increase the success likelihood for COTS software implementations—while maintaining their vital relationships with vendors.

Modernization means different things to different people—especially in the context of state government. For some, it is the cause of a messy chain reaction that ends (at best) in frustration and inefficiency. For others, it is the beneficial effect of a thoughtful and well-planned series of steps. The difference lies in the approach to transition - and states will soon discover this as they begin using the new Comprehensive Child Welfare Information System (CCWIS), a case management information system that helps them provide citizens with customized child welfare services.

The benefits of CCWIS are numerous and impressive, raising the bar for child welfare and providing opportunities to advance through innovative technology that promotes interoperability, flexibility, improved management, mobility, and integration. However, taking advantage of these benefits will also present challenges. Gone are the days of the cookie-cutter, “one-size-fits-all” approach. Here are five facts to consider as you transition toward an effective modernization.

1. There are advantages and challenges to buying a system versus building a system internally. CCWIS transition may involve either purchasing a complete commercial off-the-shelf (COTS) product that suits the state, or constructing a new system internally with the implementation of a few purchased modules. To decide which option is best, first assess your current systems and staff needs. Specifically, consider executing a cost-benefit analysis of options, taking into account internal resource capabilities, feasibility, flexibility, and time. This analysis will provide valuable data that help you assess the current environment and identify functional gaps. Equipped with this information, you should be ready to decide whether to invest in a COTS product, or an internally-built system that supports the state’s vision and complies with new CCWIS regulations.
    
2. Employ a modular approach to upgrading current systems or building new systems. The Children’s Bureau—an office of the Administration for Children & Families within the U.S. Department of Health and Human Services—defines “modularity” as the breaking down of complex functions into separate, manageable, and independent components. Using this modular approach, CCWIS will feature components that function independently, simplifying future upgrades or procurements because they can be completed on singular modules rather than the entire system. Modular systems create flexibility, and enable you to break down complex functions such as “Assessment and Intake,” “Case Management,” and “Claims and Payment” into modules during CCWIS transition. This facilitates the development of a sustainable system that is customized to the unique needs of your state, and easily allows for future augmentation.
    
3. Use Organizational Change Management (OCM) techniques to mitigate stakeholder resistance to change. People are notoriously resistant to change. This is especially true during a disruptive project that impacts day-to-day operations—such as building a new or transitional CCWIS system. Having a comprehensive OCM plan in place before your CCWIS implementation can help ensure that you assign an effective project sponsor, develop thorough project communications, and enact strong training methods. A clear OCM strategy should help mitigate employee resistance to change and can also support your organization in reaching CCWIS goals, due to early buy-in from stakeholders who are key to the project’s success.
    
4. Data governance policies can help ensure you standardize mandatory data sharing. For example, the Children’s Bureau notes that a Title IV-E agency with a CCWIS must support collaboration, interoperability, and data sharing by exchanging data with Child Support Systems?Title IV-D, Child Abuse/Neglect Systems, Medicaid Management Information Systems (MMIS), and many others as described by the Children’s Bureau.
   
   Security is a concern due to the large amount of data sharing involved with CCWIS systems. Specifically, if a Title IV-E agency with a CCWIS does not implement foundational data security measures across all jurisdictions, data could become vulnerable, rendering the system non-compliant. However, a data governance framework with standardized policies in place can protect data and surrounding processes.
    
5. Continuously refer to federal regulations and resources. With the change of systems comes changes in federal regulations. Fortunately, the Children’s Bureau provides guidance and toolkits to assist you in the planning, development, and implementation of CCWIS. Particularly useful documents include the “Child Welfare Policy Manual,” “Data Sharing for Courts and Child Welfare Agencies Toolkit,” and the “CCWIS Final Rule”. A comprehensive list of federal regulations and resources is located on the Children’s Bureau website.
   
   Additionally, the Children’s Bureau will assign an analyst to each state who can provide direction and counsel during the CCWIS transition. Continual use of these resources will help you reduce confusion, avoid obstacles, and ultimately achieve an efficient modernization program.

Modernization doesn’t have to be messy. Learn more about how OCM and data governance can benefit your agency or organization.

Artificial Intelligence, or AI, is no longer the exclusive tool of well-funded government entities and defense contractors, let alone a plot device in science fiction film and literature. Instead, AI is becoming as ubiquitous as the personal computer. The opportunities of what AI can do for internal audit are almost as endless as the challenges this disruptive technology represents.

To understand how AI will influence internal audit, we must first understand what AI is.The concept of AI—a technology that can perceive the world directly and respond to what it perceives—is often attributed to Alan Turing, though the term “Artificial Intelligence” was coined much later in 1956 at Dartmouth College, in Hanover, New Hampshire. Turing was a British scientist who developed the machine that cracked the Nazis’ Enigma code. Turing thought of AI as a machine that could convince a human that it also was human. Turing’s humble description of AI is as simple as it is elegant. Fast-forward some 60 years and AI is all around us and being applied in novel ways almost every day. Just consider autonomous self- driving vehicles, facial recognition systems that can spot a fugitive in a crowd, search engines that tailor our online experience, and even Pandora, which analyzes our tastes in music.

Today, in practice and in theory, there are four types of AI. Type I AI may be best represented by IBM’s Deep Blue, a chess-playing computer that made headlines in 1996 when it won a match against Russian chess champion Gary Kasparov. Type I AI is reactive. Deep Blue can beat a chess champion because it evaluates every piece on the chessboard, calculates all possible moves, then predicts the optimal move among all possibilities. Type I AI is really nothing more than a super calculator, processing data much faster than the human mind can. This is what gives Type I AI an advantage over humans.

Type II AI, which we find in autonomous cars, is also reactive. For example, it applies brakes when it predicts a collision; but, it has a low form of memory as well. Type II AI can briefly remember details, such as the speed of oncoming traffic or the distance between the car and a bicyclist. However, this memory is volatile. When the situation has passed, Type II AI deletes the data from its memory and moves on to the next challenge down the road.

Type II AI's simple form of memory management and the ability to “learn” from the world in which it resides is a significant advancement. The leap from Type II AI to Type III AI has yet to occur. Type III AI will not only incorporate the awareness of the world around it, but will also be able to predict the responses and motivations of other entities and objects, and understand that emotions and thoughts are the drivers of behavior. Taking the autonomous car analogy to the next step, Type III AI vehicles will interact with the driver. By conducting a simple assessment of the driver’s emotions, the AI will be able to suggest a soothing playlist to ease the driver's tensions during his or her commute, reducing the likelihood of aggressive driving. Lastly, Type IV AI–a milestone that will likely be reached at some point over the next 20 or 30 years—will be self-aware. Not only will Type IV AI soothe the driver, it will interact with the driver as if it were another human riding along for the drive; think of “HAL” in Arthur C. Clarke’s 2001: A Space Odyssey.

So what does this all mean to internal auditors?
While it may be a bit premature to predict AI’s impact on the internal audit profession, AI is already being used to predict control failures in institutions with robust cybersecurity programs. When malicious code is detected and certain conditions are met, AI-enabled devices can either divert the malicious traffic away from sensitive data, or even shut off access completely until an incident response team has had time to investigate the nature of the attack and take appropriate actions. This may seem a rather rudimentary use of AI, but in large financial institutions or manufacturing facilities, minutes count—and equal dollars. Allowing AI to cut off access to a line of business that may cost the company money (and its reputation) is a significant leap of faith, and not for the faint of heart. Next generation AI-enabled devices will have even more capabilities, including behavioral analysis, to predict a user’s intentions before gaining access to data.

In the future, internal audit staff will no doubt train AI to seek conditions that require deeper analysis, or even predict when a control will fail. Yet AI will be able to facilitate the internal audit process in other ways. Consider AI’s role in data quality. Advances in inexpensive data storage (e.g., the cloud) have allowed the creation and aggregation of volumes of data subject to internal audit, making the testing of the data’s completeness, integrity, and reliability a challenging task considering the sheer volume of data. Future AI will be able to continuously monitor this data, alerting internal auditors not only of the status of data in both storage and motion, but also of potential fraud and disclosures.

The analysis won’t stop there.
AI will measure the performance of the data in meeting organizational objectives, and suggest where efficiencies can be gained by focusing technical and human resources to where the greatest risks to the organization exist in near real-time. This will allow internal auditors to develop a common operating picture of the day-to-day activities in their business environments, alerting internal audit when something doesn’t quite look right and requires further investigation.

As promising as AI is, the technology comes with some ethical considerations. Because AI is created by humans, it is not always vacant of human flaws. For instance, AI can become unpredictably biased. AI used in facial recognition systems has made racial judgments based on certain common facial characteristics. In addition, AI that gathers data from multiple sources that span a person’s financial status, credit status, education, and individual likes and dislikes could be used to profile certain groups for nefarious intentions. Moreover, AI has the potential to be weaponized in ways that we have yet to comprehend.

There is also the question of how internal auditors will be able to audit AI. Keeping AI safe from internal fraudsters and external adversaries is going to be paramount. AI’s ability to think and act faster than humans will challenge all of us to create novel ways of designing and testing controls to measure AI’s performance. This, in turn, will likely make partnerships with consultants that can fill knowledge gaps even more valuable. 

Challenges and pitfalls aside, AI will likely have a tremendous positive effect on the internal audit profession by simultaneously identifying risks and evaluating processes and control design. In fact, it is quite possible that the first adopters of AI in many organizations may not be the cybersecurity departments at all, but rather the internal auditor’s office. As a result, future internal auditors will become highly technical professionals and perhaps trailblazers in this new and amazing technology.