Internal audit, redefined
乐鱼（Leyu）体育官网 helped a major U.S. regional power and utility company accelerate audit cycles and enable greater emphasis on reliable, relevant data.
Client
A major U.S. regional power and utility company
Sector
Energy
Project
Reposition the IA function using Agile principles
Share
As a power and utility company serving millions of customers across multiple states, our client was not only highly visible to the public but also subject to stringent regulatory oversight. As a result, the need for an internal audit (IA) process that delivered the most advanced compliance, controls, and risk management functions was critical. For聽many years, 乐鱼（Leyu）体育官网 had advised the client on Sarbanes-Oxley compliance and IA. Now senior management needed help applying聽乐鱼（Leyu）体育官网 Agile IA principles to increase value and further reduce risk from the IA function.
Redefining IA through collaboration
IA functions need to adjust their priorities and methods to match dynamic business conditions. If IA can鈥檛 adjust to meet new risks and changes within the enterprise, then its value is diminished. While our client already leveraged some Agile IA concepts, the full breadth and value of the Agile principles had not yet been explored within the IA function.
Audits of any type come with negative connotations, and when it is an IA function, it can add a layer of complexity. Ten to fifteen years ago, the audit function was much more rigid and focused almost exclusively on policy compliance. And even now, audits tend to be conducted in silos, with only limited communication to the rest of the business. As a result, managers and personnel came to regard auditors as the corporate 鈥減olice,鈥� whose role was to detect problems or risks and leave the solutions to others.
In our client鈥檚 case, senior management appreciated the value that 乐鱼（Leyu）体育官网 offered by helping the company identify and avoid risks. But they also understood that to enhance compliance and risk processes, increased alignment between IA and the entire rest of the business would be essential.
The most important asset that our work yielded was greater trust for IA. By making IA more efficient, relevant, and collaborative, we built greater trust for it throughout the business. This in turn made it easier for IA to gain cooperation and insight from other departments.
Agile IA equals speed to value
Working closely with 乐鱼（Leyu）体育官网, our client set out to reposition the IA function. Instead of acting as a detective finding existing problems, the 乐鱼（Leyu）体育官网 IA team became a trusted adviser of the company, taking steps to solve problems proactively鈥攕ometimes even before they actually arose. The basis for this transformation would be following the 乐鱼（Leyu）体育官网 Agile IA methodology.
Agile IA accelerates audit cycles by enabling faster decisions, more nimble process adjustments, and a greater emphasis on reliable, relevant data. These elements foster better decision-making overall as well as increase IA鈥檚 transparency and trust within the organization. The cumulative effect is to raise the perceived value of IA to a wider range of stakeholders.
Quickly establishing the principles of Agile IA with the client was key. Consistent weekly or even daily communication set the tone and built confidence from the start. And unlike traditional audits that follow a linear, structured, and predetermined model, Agile audits are more flexible and fluid, performed through short, iterative 鈥渟prints鈥� aimed at determining specific risk points. This allows for continuous touchpoints with stakeholders and staff and ongoing process improvements as the audit proceeds. Communication and collaboration were also critical for building greater trust in our recommendations, which were codeveloped with the client.
We also showed our client how to restructure IA processes. For example, auditing 100 percent of a population instead of a small sample not only yielded more credible insights but also shed new light on key business processes. In addition, powering our audits through data analytics helped provide scope and magnitude to observations and recommendations, so that leadership could prioritize which risks need to be handled first.
Operationally, collaborative, empowered teams replaced individuals focused on discrete tasks. Heads-up collaboration supplanted rigid, heads-down processes. And instead of repeating the same audit event聽every year, Agile spurred participants to think critically about adapting new controls to continuously meet changing conditions and emerging risks.
Better practices build business-wide buy-in
Key examples of how our 乐鱼（Leyu）体育官网 Agile IA initiatives paid off for the client include:
- Faster reporting cycles.聽The 鈥渟print鈥� approach to communicating questions and findings accelerated the process of producing an approved report to a matter of weeks instead of months. This didn鈥檛 just mean faster access to results but less time and effort for participants within IA and beyond.
- Concise, consistent reporting.聽Concise and consistent reporting templates for upper management allowed for a smooth process instead of a long, painful one, as reporting could be prior to Agile IA.
- Prioritized risk reduction via data analytics.聽Instead of relying on small, anecdotal samples, 乐鱼（Leyu）体育官网 used Agile to gather larger data sets and analyze them more effectively. This produced risk insights that were statistically valid, providing scope and magnitude to the observations and allowing the client to better prioritize their risk reduction strategy.
- Future-focused risk reviews.聽Instead of simply raising alarms over existing threats, Agile IA gave the client advance warning of potential near- or long-term issues.
- Better, faster risk mitigation.聽Enabling better, faster risk mitigation equates to less-effort audits, resulting in cost savings.
- Greater stakeholder trust.聽Agile IA methodologies drive speed to value, making things better, faster, smarter, and safer for our client鈥檚 external stakeholders and customers.
- Greater trust for IA.聽The most important asset that our work yielded was less tangible. By making IA more efficient, relevant, and collaborative, we built greater trust for it throughout the business. This in turn made it easier for IA to gain cooperation and insight from other departments.
Why 乐鱼（Leyu）体育官网?
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Take IA from a 鈥渕ust-have鈥� to a 鈥渧alue-add鈥�
Many businesses regard the IA function as a cost center and a regulatory must-have rather than a potential value- add. Our 乐鱼（Leyu）体育官网 Agile IA solution is designed to reverse that narrative. The Agile IA function will let you drive organizational efficiency and free up teams to focus on driving value.
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A 鈥渙ne team鈥� approach
From day one, 乐鱼（Leyu）体育官网 adopts a 鈥渨e鈥檙e in this together鈥� perspective toward our clients. We learn to function as a team by immersing ourselves in their culture, processes, objectives, and critical success factors. Our success is defined by their success.
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Achieve enduring benefits from enduring relationships
When you work with 乐鱼（Leyu）体育官网, you get much more than a consultant. While our teams bring deep industry聽experience to each engagement, our real goal is to learn everything we can about each client鈥檚 specific business as it evolves over time and tailor our methodologies and services accordingly.
Meet our team
Tate Anderson
Partner, National Advisory Leader, Power and Utilities, 乐鱼（Leyu）体育官网 US
Jeffrey Taraba
Director Advisory, Internal Audit & Enterprise Risk, 乐鱼（Leyu）体育官网 LLP
Tate Anderson
Partner, National Advisory Leader, Power and Utilities, 乐鱼（Leyu）体育官网 US
Jeffrey Taraba
Director Advisory, Internal Audit & Enterprise Risk, 乐鱼（Leyu）体育官网 LLP