Despite the fact that data analytics and Computer Assisted Audit Techniques (CAAT) have been a part of auditing for nearly thirty years, many organizations are still struggling with the implementation of effective data analytics to enhance internal audit quality and effectiveness.
Increasing complexities of risks and incessant emergence of disruptive technologies are demanding substantial change in internal audit processes.
In today’s world of constant disruption, internal audit should evolve into a dynamic and future-oriented function.
Businesses need broad-spectrum audit processes that extend beyond reviewing the obvious. Auditors should adopt forward-looking IA approaches, and should be able to provide deeper and valuable insights on strategy, execution, emerging risks, and hidden opportunities.
The 2016 Deloitte Global Chief Audit Executive Survey that polled more than 1200 CAEs from 29 countries and a diverse range of industries, reaffirms the growing need to conduct analytics-based auditing. More than a three quarter of the CAEs (79%) recommend the need for digital disruption and innovation to transform internal audit and enhance its value. The survey also cited the increasing relevance of cutting-edge technologies such as artificial intelligence, cognitive computing, and visual analytics.
Is skill-gap a concern?
More than half of CAEs (57%) who participated in the survey expressed their intense dissatisfaction about inadequate skills and insufficient expertise of audit teams.
When left unaddressed, these skill gaps will weaken auditors’ capabilities to deliver on changing stakeholder expectations.
Stakeholders expect more forward-looking analysis to uncover risks and hidden opportunities.Gone are the days of static audit reports and analysis of sample data.
The Deloitte survey also cites risk anticipation (39%) and data analytics (34%) as the two groundbreaking innovations that are most likely to impact internal audit within the next five years. Changing business landscapes, technological advancements, and proliferation of data have brought forth the imminent need to leverage analytics and data visualization to increase the impact, influence, and effectiveness of internal audit.
Analytics Adoption Challenges
Even after 30 years of inception of data analytics, many auditors continue to adopt conventional internal audit methods and lag in technology adoption. Wondering why? Here are some of the reasons:
- Insufficient IT support
- Difficulty to manage and manipulate data
- Increasing requests for ad-hoc analysis and one-off reports
- Difficulty in dealing with the basic aspects of data management and governance
Can technology disruption be a savior?
Advancements in technology are fundamentally changing the nature of the audit and improving its effectiveness and relevance. Here are a few game-changing technology solutions that auditors can harness effectively to enhance the way they work with data:
1.Self-service analytics – Smart analytics for all
Self-service analytics is no more a buzzword. It’s the new norm. Self-service analytics empowers auditors to access data, perform queries, and create interactive reports that add richness and granularity to the insights derived. Anyone and everyone, with or without technical expertise, can harness the power of self-service analytics to work seamlessly with large data sets of any size or type, and discover savvy insights without having to write codes or learn programming languages.
Key advantages of using self-service analytics tools: Explore your data and create ad-hoc reports without IT skills
- Easy access to any source data
- Guided analysis – Faster answers to complex questions
- Intuitive drag-and-drop interface to create and share interactive reports.
- Natural language processing to respond to complex queries
- Interactive visualizations and personalized dashboards to identify patterns and trends
- Fast to deploy and easy to manage
- All-encompassing data analysis anywhere and available anytime
2.Mobile Analytics – Audit insights on the go
Regardless of the size of an organization or availability of data, it takes weeks to prepare and present comprehensive audit reports. The numbers are usually saved offline as large files or copied to multiple slides for boardroom meetings.
Mobile data analytics enables a concise and easily accessible digital avatar of audit reports and dynamic dashboards that can be accessed on mobile devices to interact and proactively monitor the business information on the go.
When it comes to presenting audit data, reports and findings, one gets a single view of the entire raw data, all at once. This makes it difficult to decipher what is important and what isn’t, the reason why the point of sharing information gets defeated. Data visualization helps get a flexible and reliable way to identify and share pertinent information in a manner that everyone can easily understand.
- Process more information than reading numbers
- Discover insights using spatial relationships, colors, and textures
- Make data accessible to a broader audience and provide users with a rich and engaging experience
There are many reasons why auditing is ripe for self-service analytics and visualization driven transformation. There is more data to examine within limited time availability. Most financial and operational transactions are moving online, and the number of variables, outliers, trends, and patterns to identify and analyze continue to increase each day.
Visual analytics is the fastest way to analyze and understand structured or unstructured data of any size, without IT assistance. Visual technologies help speed up and improve decision making with heat maps, bubble charts, and interactive dashboards that are easy for C-suite executive, non-technical business users, and stakeholders to understand.
Everything gets better when you can do it yourself, right? Self-service audit analytics and visualization too are not different.
Benefits of self-service analytics in Internal Audit
- Analytics for everyone: Everyone in an IA Team can perform analytics and build audit dashboards – It’s a cultural shift
- Greater insights – Transform audit, increase audit quality, and create more impact
- Increased coverage – Identify more risks and opportunities
- Generate and deliver more forward-looking recommendations quickly – From auditors to business advisors
- Minimal Investment, Tangible and Quicker ROI
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