Auditing and Assurance Services

Dear IT Auditors, Audit Strategy for Cloud-Native Environments Cloud-native systems have transformed IT. Containers, microservices, and serverless functions bring speed and scalability, but they also create risks that traditional audits do not address. If your audit strategy does not account for these environments, you risk overlooking critical exposures. Building an effective audit strategy for cloud-native environments requires the understanding how technology is built, it’s operation, and where control points exist in this dynamic ecosystem. 📌 Define scope and risk domains clearly You are not auditing a single application anymore. You are auditing clusters, APIs, and workloads that spin up and down quickly. Common risks include misconfigured Kubernetes roles, weak API security, and untested failover. Expand scope to include CI/CD pipelines, registries, and orchestration layers. 📌 Apply shared responsibility at a granular level Cloud providers secure the infrastructure. Your teams secure applications, workloads, and entitlements. Auditors must map responsibilities between provider, operations, and development. Without clarity, key risks fall through the cracks. 📌 Integrate audit checkpoints into pipelines The right time to test security is before deployment. Review whether code and infrastructure templates are scanned for vulnerabilities. Check that image repositories enforce trusted sources. Confirm that pipelines require automated approvals for changes. Embedding assurance early reduces the risk of insecure releases. 📌 Focus on workload identity and entitlements Machine-to-machine communication is core to cloud-native. Weak workload identities can allow lateral movement or privilege abuse. Auditors should validate RBAC settings, rotation of service credentials, and monitoring of privileged actions. 📌 Verify observability and monitoring Audit effectiveness depends on visibility. Logs, metrics, and traces must cover container activity, API calls, and serverless execution. Test whether anomalies are flagged in near real-time and whether evidence is retained for audits or investigations. 📌 Evaluate resilience practices Scalability and self-healing only work if properly configured. Review whether teams run load tests, chaos experiments, or recovery drills. Resilience should not be assumed; it should be validated. 📌 Translate technical findings into business risks Executives do not want details about pods or nodes. They want to know whether downtime will impact revenue, whether customer data is secure, and whether resilience is proven. Present your findings in business terms. Cloud-native auditing requires a balance of technical fluency and business context. By focusing on scope, responsibility, entitlements, observability, and resilience, you provide assurance that these dynamic systems are secure and reliable. #ITAudit #CloudAudit #CloudNative #CybersecurityAudit #RiskManagement #DevOpsAudit #CloudSecurity #AuditStrategy

🔍 Understanding Trust Principles in Audit: Why They Matter More Than Ever:- In today’s digital-first environment, trust is no longer assumed. It is audited, tested, and evidenced. In assurance engagements, particularly SOC reports and IT audits, this trust is evaluated through the AICPA Trust Services Criteria (TSC), often referred to as the Trust Principles. These principles form the foundation for assessing whether systems are designed and operating effectively. Here’s a breakdown of the five core trust principles and their practical relevance: 🔐 1. Security (Mandatory for SOC 2) Ensures systems are protected against unauthorized access, both logical and physical. This includes: - User provisioning and deprovisioning - Privileged access management - Authentication (SSO, MFA) - Logging, monitoring, and incident response - Change management This is where IT General Controls (ITGCs) play a critical role. ⏱️ 2. Availability Focuses on whether systems are available as committed or agreed. Key considerations include: - System uptime and performance monitoring - Backup procedures - Disaster Recovery (DR) and Business Continuity Planning (BCP) - Capacity management 🧮 3. Processing Integrity Ensures system processing is complete, accurate, timely, and authorized. Auditors typically evaluate: - Input, processing, and output controls - Error handling and reconciliations - Change controls impacting business logic 🔒 4. Confidentiality Protects information designated as confidential. Common audit areas include: - Data classification - Encryption (at rest and in transit) - Restricted access to sensitive data - Secure data disposal 👤 5. Privacy Addresses how personal information is collected, used, retained, and disposed of in line with privacy commitments. Includes: - Privacy notices and consent - Data retention and deletion - Regulatory compliance (for example GDPR, CCPA) 💡 Why this matters For organizations, these principles are not just compliance requirements. They are signals of reliability and credibility to customers, regulators, and stakeholders. For auditors and risk professionals, they provide a structured lens to assess whether technology truly supports business objectives while managing risk. As systems grow more complex and interconnected, trust is built through controls, evidence, and transparency, not assumptions. Would love to hear how others are seeing these principles applied in real-world audits and SOC engagements. Kalesha & co #Audit#ITGC#SOCReports#TrustServicesCriteria#RiskManagement#CyberSecurity#Assurance#InternalControls

We audit every day. But do we ever stop to ask why? Files get reviewed. Findings get raised. Reports get issued. Actions get tracked. It’s what we do. But somewhere between planning meetings and closing meetings, audit can quietly become routine. We get very good at doing audit and slowly forget to anchor ourselves in why we do it. In this 16-part series am breaking down the Domains and Principles of Internal Audit beginning with Domain One, which interestingly has no principle. It simply defines OUR PURPOSE. "The purpose of internal audit is to strengthen the organization’s ability to create, protect, and sustain value by providing the board and management with independent, risk-based, and objective assurance, advice, insight, and foresight." It’s a short statement but it is loaded. Create. Protect. Sustain. Are we helping the organization create value — or are we only identifying control gaps? Are we protecting value — or are we pointing out weaknesses after value has already been eroded? Are we thinking about sustainability of the controls? Then comes the weightier test: are we truly independent? Not just structurally, but intellectually. Can we challenge management when necessary? Do we escalate uncomfortable truths? Is our function positioned with direct accountability to the Board and do we behave like it? And what does “risk-based” really mean in our day-to-day work? It means prioritizing what could materially derail strategy. It means understanding the business deeply enough to know where value is most vulnerable and where it is most likely to be created. The purpose statement does not stop at assurance. It calls for advice, insight, and foresight. That is a high bar. If audit only appears after something has gone wrong to explain what should have been done, we are providing hindsight. Necessary, yes. But limited. Foresight: helping management anticipate emerging risks, strategic shifts, structural weaknesses is where audit moves from compliance partner to strategic enabler. The statement also reminds us that audit is most effective when performed by competent professionals in conformance with the Global Internal Audit Standards, and when the function is independently positioned. Every single word in that purpose statement should influence how we plan audits, how we conduct interviews, how we write findings, and how we engage stakeholders. So before we move into the technical principles in the coming weeks, this is the reset. In our next audit assignment, perhaps the real question is not “Did we complete the audit?” but: "Did we strengthen the organization’s ability to create, protect, and sustain value"? That is our purpose and purpose should never become routine. #InternalAudit #AuditLeadership #Governance #RiskManagement #GIA

𝗙𝗿𝗼𝗺 𝗜𝗻𝘁𝗲𝗿𝗻𝗮𝗹 𝗔𝘂𝗱𝗶𝘁𝗼𝗿 𝘁𝗼 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗣𝗮𝗿𝘁𝗻𝗲𝗿 It's been nine months since the Global Internal Audit Standards from The Institute of Internal Auditors became effective. Having had some time to reflect, I would like to remind everyone of some key shifts that I believe will truly elevate our profession from a backward-looking function to a forward-thinking business partner. 𝗛𝗲𝗿𝗲'𝘀 𝘄𝗵𝗮𝘁 𝘀𝘁𝗮𝗻𝗱𝘀 𝗼𝘂𝘁 𝘁𝗼 𝗺𝗲: 1️⃣ 𝗙𝗼𝗿𝗲𝘀𝗶𝗴𝗵𝘁, not just hindsight. The new Purpose statement for internal auditing now explicitly mentions "foresight". This marks a step forward. It focuses on anticipating risks and providing proactive advice to help the business thrive. 2️⃣ 𝗘𝘀𝘀𝗲𝗻𝘁𝗶𝗮𝗹 𝗖𝗼𝗻𝗱𝗶𝘁𝗶𝗼𝗻𝘀. The Standards introduce "Essential Conditions" that must be in place for internal audit to be effective. This means the Chief Audit Executive (CAE) needs to sit down with the Board and Senior Management to discuss and agree on these conditions. It formalises the support we need to do our jobs right. 3️⃣ 𝗧𝗵𝗲 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗿𝗼𝗮𝗱𝗺𝗮𝗽. The CAE must now develop an internal audit strategy. This is not a one-year plan but a long-term vision and plan of action for the internal audit function. It's the roadmap for fulfilling our mandate and achieving long-term success. 4️⃣ 𝗔𝘀𝘀𝘂𝗿𝗮𝗻𝗰𝗲, not duplication. The new Standards emphasise working with other assurance providers, such as external auditors, to reduce overlapping efforts and uncover gaps in risk coverage. 5️⃣𝗖𝗵𝗮𝗿𝗮𝗰𝘁𝗲𝗿 𝗺𝗮𝘁𝘁𝗲𝗿𝘀. The Standards now emphasise professional courage and scepticism. We are expected to speak up and critically evaluate information, even when it is uncomfortable or difficult. It’s about having the conviction to do what is right, based on the facts. 6️⃣ 𝗤𝘂𝗮𝗹𝗶𝘁𝘆 has two parts. It isn't just about following the rules (conformance), but also about meeting performance objectives (performance). It serves as a good reminder that the value of our work is judged not only by how well we follow standards but also by the real impact we create. What are your thoughts on these new Standards? 𝙒𝙝𝙖𝙩 𝙘𝙝𝙖𝙣𝙜𝙚𝙨 𝙝𝙖𝙫𝙚 𝙮𝙤𝙪 𝙛𝙤𝙪𝙣𝙙 𝙢𝙤𝙨𝙩 𝙞𝙢𝙥𝙖𝙘𝙩𝙛𝙪𝙡?

Enhancing Internal Audit Programs through Risk-Based Auditing: A Strategic Approach Integrating Risk-Based Auditing (RBA) into internal audit programs enhances effectiveness and efficiency. Learn how to achieve this strategic approach: Understanding Risk-Based Auditing - Risk-Based Auditing (RBA) identifies and assesses key risks to an organization's objectives, allocating resources to high-risk areas for more relevant and timely insights. Key Steps to Integrate RBA - 1. Understand the Organization: Understand the organization's objectives, strategies, and risk landscape by reviewing key documents and consulting with stakeholders to identify critical risk areas. 2. Risk Assessment: Conduct a thorough risk assessment to identify and prioritize risks using tools like risk matrices and heat maps, forming the foundation of the RBA approach. 3. Develop the Audit Plan: Develop a dynamic risk-based audit plan that aligns with the organization's risk profile, allowing for adjustments as risks evolve. 4. Allocate Resources: Allocate audit resources based on risk assessment, prioritizing high-risk areas and adjusting resource allocation accordingly. 5. Coordinate with Other Assurance Providers: Collaborate with other assurance providers to avoid duplication and ensure comprehensive risk coverage. 6. Communicate the Plan: Communicate the risk-based audit plan to stakeholders to gain support and understanding of audit focus and priorities. 7. Continuous Monitoring and Updating: Regularly review and update the risk-based audit plan to reflect changes in the organization's risk environment and ensure ongoing effectiveness. Benefits of Risk-Based Auditing - i. Enhanced Focus: RBA focuses on high-risk areas, addressing critical issues and leading to more impactful audit outcomes. ii. Proactive Risk Management: RBA promotes a proactive approach to risk management, helping organizations to anticipate and mitigate risks before they materialize. iii. Improved Resource Allocation: Efficient use of audit resources by focusing on areas that matter the most, thereby increasing the overall efficiency of the audit process. iv. Better Stakeholder Communication: Clear communication of the audit plan and its focus areas enhances transparency and builds trust with stakeholders. Conclusion - Integrating Risk-Based Auditing into internal audit programs is not just a best practice but a necessity in today’s dynamic business environment. It enables organizations to stay ahead of potential risks, ensuring robust risk management and sustained success.

Before, we audited just controls. Now, we audit algorithms. That’s how fast our world is changing. AI is no longer “supporting” the business. It is the business. And that changes everything about assurance. AI doesn’t run like a traditional system, It learns. ↳ Sometimes from labeled data, ↳ Sometimes from hidden patterns, ↳ Sometimes by trial and error. Each pathway brings its own risks. And if we, as auditors and governance professionals, don’t follow the entire lifecycle from data acquisition to ongoing monitoring, we risk missing the very things that can break trust: ↳ Data quality slipping under the radar ↳ Bias embedding itself in outputs ↳ Documentation failing compliance checks ↳ Ethical blind spots with real human consequences The technical checks matter. Yes, they do! But the bigger question is: Does this AI serve the business with ROI, accountability, and human impact in mind? That’s where our expertise in risk, governance, and ethics becomes invaluable. We’re not here to slow innovation. We're here to make sure innovation and control advance together. Because the future of auditing isn’t about systems supporting the business. It’s about providing assurance over systems that are the business. And that’s a responsibility I take seriously. #AIGovernance #InternalAudit #ResponsibleAI #RiskManagement #TechEthics

Transforming the landscape of IT audit requires a strategic focus on several key areas: 1. ITGC & SOX Transformation Modernizing traditional IT General Controls through: - Continuous Controls Monitoring (CCM) - Automated ITGC in S/4HANA environments - Cloud and hybrid ERP governance This shift moves from periodic testing to automated, data-driven assurance. 2. ITAC & Process Analytics Strengthening automated controls across business cycles: - End-to-end ITAC validation - 100% population data analytics - Embedded control logic testing This approach moves beyond sample testing to full-population analytics. 3. AI & Automation Audits Establishing governance over intelligent systems: - AI model risk and governance review - RPA & bot lifecycle controls This ensures transparency, accountability, and controlled automation. 4. Cyber & Technology Risk Providing advanced technology assurance including: - Zero Trust architecture review - Cloud Security (CSPM) - DevOps & CI/CD governance This aligns cyber maturity with financial reporting impact. 5. ESG Assurance Enabling technology-driven sustainability reporting: - Scope 1/2/3 data validation - ESG data governance & reporting compliance This integrates sustainability data into financial control frameworks. 6. Fraud & Forensic IT Audit Implementing proactive fraud detection using analytics: - ERP super-user abuse detection - Payment fraud & anomaly monitoring This transitions from reactive investigations to predictive monitoring. 7. ERP Transformation Audit Ensuring risk oversight during system transformation: - Data migration validation - Cutover controls - Program governance This protects financial integrity during ERP modernization. 8. Blockchain & Digital Assets Assuring emerging technology: - Smart contract validation - Crypto custody controls This ensures governance over decentralized transactions. 9. Quantum Computing Risk Preparing for future cryptographic readiness: - Post-quantum encryption review - Cryptographic agility assessment This gets us ready for future encryption disruption 10.Future of IT Audit The profession is evolving toward: -AI-powered audit assistants -Real-time ERP monitoring -ESG and financial integration

How Does Internal Audit Balance Assurance and Advisory Roles? Balancing the assurance and advisory roles in internal audit is challenging yet essential for adding value to an organisation. According to The Internal Audit: Vision 2035 – Creating Our Future Together research, 28% of respondents identified this as a key challenge. Here are key guidelines for balancing these roles: ✔️Clarify Expectations: Establish clear communication with stakeholders to define the scope of both assurance and advisory engagements. ✔️Separate Roles: Ensure that advisory services are distinct from audit activities to maintain objectivity and independence. Advisory roles should not influence or compromise assurance work. ✔️Risk-Based Approach: Prioritise activities based on risk, with assurance focusing on high-risk areas and advisory roles aimed at providing guidance on improving processes. ✔️Effective Resource Allocation: Allocate resources efficiently to ensure that both roles receive the necessary attention without overwhelming the audit function. ✔️Maintain Independence: In advisory roles, auditors must remain neutral, providing recommendations without becoming involved in decision-making or implementation. ✔️Stakeholder Engagement: Regularly engage with management to stay aligned on priorities and provide insights that improve performance while safeguarding independence. ✔️Clear Reporting: Differentiate between assurance findings and advisory suggestions in reporting, making sure stakeholders understand the distinction between compliance findings and recommendations for improvement. ✔️Continual Development: Invest in ongoing professional development for auditors to strengthen both assurance and advisory capabilities, fostering a balanced and adaptable audit function. By clearly defining boundaries and maintaining independence, internal auditors can effectively balance their assurance and advisory responsibilities. How does your internal audit function balance its assurance and advisory roles? 🤔 Share your experiences and strategies in the comments below! #InternalAudit #AssuranceAndAdvisory #AuditBalance #RiskManagement #AuditIndependence #InternalAuditExcellence #AuditStrategy #Governance #AuditProfessionals #AuditLeadership #RiskBasedAudit #FutureOfAudit #AuditInsights #AdvisoryServices #AuditBestPractices

People often ask what I do. “AI audit & assurance” sounds abstract. "Are you an ISO 42001 auditor" --> No, but it's complicated. Here is the plain-English version. First, it's not just me. I lead a pretty amazing team at BABL AI. We help organizations reduce real business risk from high-risk AI systems. Our clients fall into two groups: ↳ AI providers selling high-risk tools ↳ Enterprises building or using high-risk AI internally Same underlying problem. Different pressure points. Enterprises are nervous about AI. Compliance risk. Liability risk. Reputational risk. Financial risk. That nervousness shows up in procurement, governance reviews, legal questions, and sometimes stalled deals. For AI providers, the problem is trust. Enterprise buyers want proof that your system has actually been tested, governed, and independently reviewed. Not marketing claims. Not slide decks. Questions like: ↳ Has this system been tested for bias, accuracy, and security? ↳ What were the results? ↳ Is customer data exposed or reused? ↳ Has this system been validated or audited by someone independent? We come in as an independent third party and verify the answers. Often, deals do not close without this work. For enterprises, the problem is capacity and credibility. Internal teams are under pressure from regulators, lawyers, and boards. They need assurance over real systems, fast. Many do not have the time or specialized skills to do it alone. The playbook is the same for both: ↳ Define what “good” looks like using a clear standard ↳ Test or review against that standard ↳ Provide defensible, independent assurance Yes, sometimes that includes ISO/IEC 42001 work (mostly to play the role of "internal audit" to satisfy Clauses 9 & 10). But the real problem we solve is helping organizations use AI without flying blind. We have a lot of students looking to get into this field, so hopefully this is helpful to them as well. ♻️ Repost if you think this might to helpful to others.

Auditing isn’t just about checking numbers — it’s about ensuring trust, transparency, and accountability in every organization. Audits play a crucial role in maintaining financial integrity, regulatory compliance, and operational efficiency. Each type of audit serves a unique purpose in protecting an organization from risks, fraud, and inefficiencies while enhancing performance and credibility. Key Types of Audit Include: • Financial Audit: Ensures financial statements are accurate and compliant with accounting standards. • Internal Audit: Evaluates risk management, control, and governance within an organization. • Compliance Audit: Verifies adherence to legal and regulatory requirements. •Forensic Audit: Investigates fraud and financial misconduct. • Operational Audit: Reviews business processes for efficiency and improvement. • Tax Audit: Examines declared income under tax laws for accuracy. • Cybersecurity Audit: Assesses digital security and protection of sensitive information. ✓ Every audit builds confidence — not just in systems, but in the integrity of the organization itself. #Audit #Accounting #Finance #InternalAudit #ExternalAudit #Compliance #ForensicAudit #BusinessTransparency #CorporateGovernance #connect #repost