Agile Defined

Agile is a methodology that focuses on maintaining flexibility and staying in touch with clients. It recognizes that the linear approach taken in traditional project management tends to slow down team progress rather than produce value. Agile attests to a better approach, that being, frequent observations of job progress and prioritization of short-term planning during each iteration of a process.

Agile’s Origins

The term “Agile” was popularized by The Agile Manifesto for Software Development, a home for a collection of concepts and practices designed initially for software development. Its goal was to improve quality and reduce the costs and time of delivery. Its primary focus continues to be the stakeholders of a business or organization. Over time, Agile ideology was adopted by the internal audit function.

Agile in Practice: The Audit

When applied to the audit process, Agile aims to accelerate the audit cycle, drive timely insights, decrease the quality of audit documentation and reduce unnecessary human resources efforts. It does so through three techniques: Sprints, Kanban and Scrum:

1. Agile enforces a practice of performing audit work in short, iterative periods or Sprints.
2. It emphasizes a more flexible project management approach, referred to as Kanban.
3. Small, cross-functional teams work on audit tasks over short time periods using the Scrum approach. Scrum is self-governing, and each sprint is determined by a scrum team.

Sprints, Kanban and Scrum complete the entire Agile audit methodology at each step, from planning and presenting to reviewing outcomes. Agile prompts internal auditors and stakeholders, at the outset of the audit, to determine the added value to be delivered.

Why Consider Agile for Internal Audit?

You may question whether Agile is more complicated than traditional or existing development methods. Perhaps you are comfortable with the way things are and don’t want to disrupt the audit flow and practice. Or maybe Agile sounds good in practice but may be too expensive or time-consuming to implement, monitor and train employees on its functionality.

While such skepticism is reasonable, sometimes change is good, particularly when the outcome can meet or even beat your expectations. In fact, Agile came about precisely because businesses and internal auditors recognized that it was inefficient and costly to define all user needs upfront and then aim to develop finished products that met their users’ requirements. Thus, the Agile approach addressed and answered the demands for clear direction and ongoing internal and client communication.

Agile prioritizes audits based on importance, urgency and readiness to undertake the work. These priorities, over time, have proven successful in providing the following internal audit benefits:

• An Agile audit can enable internal auditors to adjust more quickly to ever-evolving strategies, priorities, technologies, regulations and macroeconomic forces.
• Traditional internal audit reporting focuses on documenting the work conducted throughout the audit. Agile reporting, on the other hand, provides insights into elevating the audit practice by making each step clean, consistent and according to schedule.
• Agile allows you to mitigate project risks by being nimble, ready for and open to change.

When to Consider an Agile Internal Audit Approach

It is never too late for internal audit groups to consider an Agile audit approach. Agile can be applied to the internal audit function when implementing a change initiative. Additionally, it can be adopted by specific internal auditing activities, including audit planning, fieldwork, reporting and presenting.

Assume you need to complete an increased number of audits in the same or less time. Or perhaps you want to promote stronger stakeholder relationships. Maybe your goal is to deliver more relevant reports or present audits with a greater impact or message but with less documentation. These are all excellent opportunities to implement an Agile internal audit.

How to Begin

Once you have chosen to implement an Agile audit, you should ask the following questions: 1) What reasonable level of assurance do you need, and 2) what risks are most concerning to you and your team? Once you can address these questions, you are on the right track toward Agile auditing integration and implementation and reaping the benefits of its value-added offerings.

Now that you have chosen the “when,” you are ready to address the how and what — that is, how to go about implementing Agile and what tools you will need. You can take several different approaches. Your budget, timing and available resources are key indicators as to what road you take. There is no cookie-cutter approach; one decision may be ideal for one organization or business but not others.

You can opt to outsource the entire process; however, this approach can be costly and requires choosing a firm or vendor that meets your needs and integrates well with your available resources. Other options include hiring an internal expert or allocating a budget for technology that aids users in carrying out the Agile auditing function. Finally, you can pave the way entirely in-house by researching the process and carrying out the implementation step-by-step through testing, training and review.

KnowledgeLeader Offerings

Here are just a few examples of the many Agile auditing tools and publications we have published on KnowledgeLeader:

• COVID-19 Crisis Highlights the Value of Agile Auditing discusses what internal auditors need to do right now, what short-term challenges they are likely to face, and what to look forward to in the long term when the crisis is behind us, when in fact, reality may be different.
• Our performer profile, Microsoft Corporation: Leading with What’s Next in Agile Auditing, provides a real-life example of how Microsoft leverages the Agile methodology to ensure that it can flex its audit approach in uncertain times, and how it can be more creative in executing its audits and staffing models to stay ahead of the curve.
• Internal Auditing Around the World: Volume 17 focuses on the topic of resilience, given everything internal audit teams and their companies have been through in recent years. We asked chief audit executives (CAEs) and their colleagues: “What is internal audit’s role in business resilience?”
• With our KLplus subscription, you can take all of our available CPE courses, including Apply the Concept of Agile to Deliver Next-Generation Internal Auditing.
• Protiviti’s 2019 Internal Audit Capabilities and Needs Survey results provide an in-depth look at the adoption of next-generation internal audit competencies such as Agile auditing, artificial intelligence, machine learning, robotic process automation and continuous monitoring, among many others. We provide a detailed assessment of how internal audit groups are progressing on their next-generation journeys.
• Going Digital: The Future Auditor in Action offers a compendium of some of the best practices obtained from mining the respective journeys of 16 internal audit functions under the direction of their forward-thinking CAEs.

Embracing Agile at Scale

Agile practices have brought vast levels of improvement to many companies’ traditional IT functions. Companies are now exploring the possibility of similar improvements to the other parts of their organizations by scaling up their Agile teams. Explore our Agile topic page to find more resources for adopting Agile principles within your organization.