Data Analytics for Internal Auditors
We are faced with a business landscape far more complex than ever before and in some cases, traditional internal audit approaches have lost their lustre and their impact.
The rise of data analytics has touched upon numerous areas of business in its ability to reveal actionable insights that help drive that business forward, and internal audit has certainly recognised the benefit of leveraging data analytics. With new software designed to help auditors more easily compute large data sets, internal audit can focus on areas or transactions where there are no controls in place.
Implementing data analytics in highly transactional and policy-driven areas, such as expenditures, payroll, inventory and accounts payable, internal auditors can create opportunities for cutting organisational costs.
The volume of data available to businesses has increased exponentially in recent years and the traditional processes just won’t cut it any longer in all cases. Put simply there is sometimes just too much data for the sampling methods of old to be effective. They are too limited when it comes to identifying control weaknesses or risks across the greatly complex IT and financial system environments of modern organisations.
The ability to review large quantities of data at pace is not the only plus when it comes to data analytics for internal auditors. Certainly, this ability also plays a role in improving risk management within an organisation.
From noting financial risks through the analysis of accounting practices, to unearthing cyber security risks in IT records, the auditor’s data sampling methods are given a wider scope to be able to conduct a deep dive of an organisation’s data and pick out the areas of risk more easily.
Hand in hand with improving risk management is the provision of greater assurance afforded by data analytics. Creating a more systematic, holistic review of business processes, data analytics can give greater visibility to the findings coming out of different departments to see that they are in sync.
Data analytics makes it possible for information to be shared more easily across the business which means that anomalies or other findings won’t be as likely to be missed.
This also leads to greater efficiency with the historically time-consuming practice of reviewing huge data sets eschewed in favour of utilising data analytics and audit analytics software to plan, conduct and present audits.
Those audits themselves become more impactful by virtue of the software mobilised within analytics that can help auditors create meaningful data visualisations to communicate their findings. Gone are the days of lengthy tables and wordy summaries, instead charts and graphs take on the burden of proof when it comes to making presentations to the audit committee or key business stakeholders. This also satisfies the growing expectation from stakeholders who want to see internal audit positioning themselves on the cutting edge of technology.
Data analytics makes it possible for internal auditors to function on an optimal setting, streamlining their processes, speeding up their historically exhaustive practices and clarifying their findings in a way that is both digestible and impactful for the business. The ability to drill down and test whole populations of data, thereby delivering valuable insights to an organisation’s risks and processes is what makes the relationship between data analytics and internal auditors a no-brainer!