Anyone who believes internal auditing is all about poring over spreadsheets should think again, says Bridgette Mncwabe, a manager in PwC’s risk advisory practice.

Increasingly internal auditors play an advisory role in various areas, including system implementations, initial public offering readiness assessments, compliance with regulations and artificial intelligence risk mitigation, she said in an interview.

May is designated as International Internal Audit Awareness Month and the Institute of Internal Auditors’ Bermuda chapter, of which Ms Mncwabe is a member, is joining global efforts to promote the profession.

“What is really exciting about the internal audit profession is that it’s constantly evolving,” Ms Mncwabe said.

“Some of what I learnt ten years ago may not apply to what is happening now. We need to shift the way we support organisations. Technology is at the forefront, especially AI and cybersecurity.”

Ms Mncwabe is originally from South Africa and an accountant by profession. She worked in her home country, Australia and the United States, before coming to work in Bermuda.

Her focus is on working with companies, predominantly in Bermuda’s insurance and reinsurance sector, supporting them in areas including compliance with Bermuda Monetary Authority regulations, and also the Sarbanes-Oxley Act, a US federal law intended to protect investors by enhancing the accuracy and transparency of corporate financial disclosure.

There is no better way for internal auditors to fulfil their role than to gain a thorough understanding of the business they are working with, Ms Mncwabe said.

“We will try to understand your processes from end to end, such as your underwriting or claims processes, and identify where the potential exposures, or gaps, exist, based on best practice and what we’ve seen in the past,” she added.

“We talk to boards and organisations and take them through what we find. We ask about how they are responding to cyber threats and artificial intelligence.”

Identifying potential exposure to fraud and money laundering is another focus of internal auditors.

As Ms Mncwabe pointed out, the purchase of legitimate financial products can be used to disguise the origin of illicit funds.

She gave a hypothetical example of how this could apply to a Bermudian insurer.

“A policyholder pays an amount significantly more than the required premium and subsequently requests a refund of the excess,” she said. “The refund is often requested to be paid to a different account or a third party, further obscuring the audit trail.”

The growing usage of generative AI is an area of concern for many internal auditors, viewing it from a corporate governance and risk management perspective, Ms Mncwabe said.

“When you plug in AI and it drafts a report for you for the board to make a decision on, are you sure of the numbers?” she said. “We have these nice fancy tools, so what used to be done by two or three people can be done with one person or no one at all.

“And for that reason, there is, I think, heightened sensitivity from us as professionals in risk advisory and internal audits, where we’re saying it’s not that easy. You can’t take away responsibility and accountability, just because now we have these more efficient tools.”

Last week, more than 60 people attended training provided by IIA Bermuda in partnership with the Financial Intelligence Agency.

Held at the Rosebank Centre in Hamilton, the packed-to-capacity session was entitled “Safeguarding Bermuda: Practical Insights into AML, Sanctions, and Reporting”.

The training focused on:

• The role of the FIA

• Practical AML, sanctions, and reporting expectations

• How Bermuda’s financial system is safeguarded

• Reporting obligations and expectations

Most internal auditors come into the profession from an accountancy training, but there are various pathways that the IIA Bermuda chapter is happy to advise on.

“We at the IIA Bermuda chapter advocate for professionals to join our community,” Ms Mncwabe said. “We love to work within our local schools and to educate young people on how to join the profession.

“So I encourage anyone who wasn’t able to attend last week’s training, join the chapter, be involved. Ask the questions and see how you can help to protect Bermuda and the financial system.”

• For more information, visit the chapter’s website here