With the evolving IT landscape we have been in for the past 10 years and the emphasis that Covid-19 has put on a remote workforce, there is more data created daily than ever before. This high volume of data creates increased risk for organizations and internal audit to manage. It also creates opportunity for innovation – using analytics and scripting to wrangle all the data at our fingertips. Utilizing analytics and scripting will help IA increase audit coverage while increasing efficiency.
Analytics can often be a buzz word in the internal audit world, and using analytics to your advantage is easier said than done. But the benefits include increased audit productivity, reduction of audit risk, increased audit assurance, and increased opportunities for internal audit. The use of analytics can change the perception of internal audit’s role from “gotcha auditor” to a source for decision-making, process improvements and collaboration. Using analytics for purposes beyond audit will help get rid of that stigma.
I think we would all be lying if we said we have enough time, budget and resources to effectively finish our audit plan each year while also providing value to our organization. This is where analytics and scripting can be a platform for innovation and efficiency. While looking at your audit plan, try to find 2-3 procedures from one audit that could be repeated or replicated on other audits. Or, if you have a high-risk area that is audited each year, see if any of the steps can be easily automated through an audit software or an analysis tool. Being able to script out 2-3 procedures to be used on other audits or part of an audit you complete each year will increase audit productivity, potentially increase audit coverage and free-up time for IA to be a resource to your organization.
Assessing your audit plan will also allow you to identify areas to incorporate analytics, which can be used in many ways for audit purposes, such as to audit digital evidence, increase assurance by auditing more samples or entire populations with the same amount of work or less work, select a targeted or statistical sample, identify outliers and trends for investigation, and identify process improvements.
Analytics in conjunction with automating or scripting audit procedures or the analytic itself, will enable us as internal auditors to spend more time evaluating the results instead of being buried in procedures that need to be completed. As mentioned above, the transition is easier said than done.
To start this scripting and analytic journey, you must understand how the data is created and the structure in which it is stored. Then begin to identify analytics to perform and procedures that are repeatable that can be scripted for use on other audits or in future years. If you don’t know where to start on your data journey or need some assistance on performing analytics or scripting procedures, please contact us.
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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.