Transformation programme is a common phrase. And the pace of change is relentless. We explore what it means for internal audit assurance and advisory engagements alongside considering questions for audit leaders to discuss with their stakeholders.

Catalytic shifts in an enterprise are often driven by changes in the macro-environment such as competition and regulation, the organisation itself through mergers/acquisitions or new leadership and as a consequence of technology for example digitisation and artificial intelligence.

Business transformation typically takes three forms: efficiency, foundation and strategic:

Efficiency

• Doing the same but cheaper and/or faster.
• Airlines exploiting technology to check-in for flights.

Foundation

• Change to core operating model, fundamental shift in the way business is done.
• Netflix streaming movie content making postal DVD subscription method obsolete.

Strategic

• Changing the core purpose of the company.
• Amazon leveraging its retail infrastructure to offer cloud services.

Complex change of this nature is typically achieved through a portfolio of projects with interdependencies or intersecting elements - a transformation programme. Whilst they require established change management capabilities, to be successful they also need strong collaboration, dynamic coordination of resources and compelling communication.

Insights

Internal audit is the department to turn to when embarking on a transformation journey; familiar with the organisation, expert advisors regarding risk and control, practiced at assimilating information not to mention a sense of humour when the going gets tough!

Chief audit executives (CAEs) have always seen internal audit as having an important role in the management of large program risks. Yet over the years PwC's annual global internal audit study has shown that stakeholders don't always agree with limited value being seen. Interestingly, organisations often struggle with major change agendas, so perhaps there is an expectation gap.

The 2023 report highlights the unifying force of internal audit, to help combine expertise across the…