Growth is often viewed as a validation of strategy, yet it is also the point at which control environments are most vulnerable. As organizations expand through increased transaction volumes, new systems, additional vendors, or geographic spread, the processes that were previously effective begin to stretch. In my experience, failures during growth are rarely caused by the absence of controls. More often, they arise because controls no longer operate as intended under scale.
Traditional internal audit approaches tend to focus on control design, policy compliance, and historical risk assessments. While these remain important, they are often insufficient to detect risks that emerge quietly during periods of operational change. Growth introduces informal practices, role overlaps, and system dependencies that sit outside formal documentation and therefore outside conventional audit scopes.
This article highlights operational blind spots I have consistently observed in growing organizations and outlines how internal audit functions can structure their review scope to identify these risks early, before they crystallize into control failures.
1. Strategy–Execution Gaps and Under-Resourced Growth
A common blind spot during growth is the gap between strategic ambition and operational readiness. Management sets aggressive targets, but enabling resources like people, systems, and control infrastructure do not always scale at the same pace. Operational teams compensate through manual workarounds and informal approvals to meet delivery expectations.
From an audit perspective, this risk is often missed because policies exist and outputs appear acceptable. However, warning signs typically include uneven process execution across business units, high dependency on specific individuals, and delayed or retrospective controls.
Audit implication:
Internal audit should assess whether growth has been supported by proportional investment in controls and governance, rather than limiting reviews to policy compliance.
2. Data Governance Weaknesses and Shadow Reporting
As organizations grow, business units seek faster access to information. This frequently results in the proliferation of spreadsheets, local databases, and ad-hoc reporting tools operating outside core systems. Over time, these become critical inputs to management decision-making.
In practice, I have found that key reports are no longer fully traceable to source systems. Ownership of data definitions, calculations, and access rights becomes unclear, increasing the risk of inconsistent or inaccurate reporting.
Audit implication:
Internal audit should focus on data ownership, access controls, and report reproducibility particularly for reports used in performance management and strategic decisions.
3. Third-Party Risk Scaling Faster Than Oversight
Growth almost always brings an increase in third-party relationships. While vendor onboarding processes may exist, ongoing monitoring often fails to keep pace with volume and complexity. Subcontractors, cloud dependencies, and single-source providers introduce concentration and continuity risks that are not always visible at contract stage.
In several audits, I have observed that exit strategies and contingency plans for critical vendors were either untested or undocumented, despite high operational reliance.
Audit implication:
Audits should move beyond onboarding checklists and evaluate whether third-party risks are actively monitored, risk-tiered, and supported by realistic exit and contingency planning.
4. Segregation of Duties Erosion
To support operational speed, responsibilities in growing organizations often accumulate within roles. Temporary access, emergency overrides, and manual workarounds become routine, particularly in finance, procurement, and IT functions.
This erosion is often justified as a practical necessity and may not be visible without detailed access reviews.
Audit implication:
Segregation of duties assessments should focus on actual system access and compensating controls, rather than relying on documented role descriptions.
5. Project Delivery Without Sufficient Post-Implementation Review
Growth is frequently accompanied by multiple transformation initiatives, including system implementations and process redesigns. Once projects go live, focus shifts quickly to the next priority, and post-implementation reviews are either delayed or narrowly scoped.
As a result, control gaps introduced during project delivery can persist unnoticed, and expected benefits may not be fully realized.
Audit implication:
Internal audit should assess whether projects embedded control considerations throughout the lifecycle and whether post-go-live reviews evaluated both control effectiveness and benefits realization.
Structuring the Internal Audit Review Scope to Capture Growth-Related Risks
Identifying these blind spots requires internal audit to move beyond static process coverage and adopt a risk-sensing approach aligned to organizational change.
1. Pre-Engagement Risk Sensing
Before defining scope, auditors should consider recent growth indicators such as rapid hiring, system changes, vendor expansion, or regulatory developments.
2. Targeted Scope Definition
Audit objectives should be explicitly linked to growth-related risks. Scope boundaries must clearly define affected entities, systems, and interfaces, with particular attention to areas where responsibilities or data handoffs have increased.
3. Execution Focused on Reality, Not Documentation
Walkthroughs, re-performance, and targeted data analysis should be prioritized to understand how processes operate in practice.
4. Culture and Behavior Assessment
Observations during fieldwork and interviews across levels provide valuable insight into how controls are perceived and applied.
5. Reporting and Follow-Up
Findings should be framed in terms of sustainability and risk velocity, highlighting how quickly issues could escalate if growth continues. Action plans should address root causes rather than relying on additional documentation or policy updates.
Conclusion
Growth does not create risk in isolation; it exposes whether governance, controls, and culture are capable of scaling. Internal audit adds the greatest value when it anticipates where growth introduces informal practices, hidden dependencies, and control drift and adjusts its scope accordingly.
By focusing on execution realities rather than design alone, internal auditors can provide assurance that supports sustainable growth while protecting organizations from risks that only emerge at scale.
Endnotes
Institute of Internal Auditors (IIA), International Professional Practices Framework (IPPF)
COSO, Enterprise Risk Management – Integrating with Strategy and Performance
