The changing role of internal audit and use of technology
At CaseWare Analytics, we continuously examine the importance and evolution of data analytics in audit. While we were at the Financial Management Institute of Canada’s Professional Development (PD) Week in Ottawa this past November, we attended a presentation called ‘Analytics and Internal Audit’. This presentation examined not only the shift in auditors’ roles, but also how organizations are incorporating data analytics across the business in order to prepare for the future.
The role of internal audit is changing because of increasing business complexity and challenges. Internal auditors understand there is an expectation to fulfill compliance mandates while also reducing costs and providing insight as a strategic advisor to the business. An Ernst & Young survey shows that only 27% of internal auditor functions are considered strategic advisors; of those surveyed, 54% intend to be advisors within the next two years, but their biggest skills gap is in data analytics.
Today, leading organizations are incorporating data analytics in different ways, often establishing analytics as one of their organization’s top three priorities. Businesses are using data analytics to gain a competitive edge. The importance of data analytics has also manifested in staffing: Chief Data Officer roles have been created, and talent has been developed that is tasked with turning business data into business value. Companies recognize that data analytics is not solely a technology issue—it is also a business issue, so they are integrating it into their corporate culture.
Adopting data analytics, the presentation explains, will benefit audit professionals and their companies in the following areas:
Data analytics skills will: improve risk assessment; provide better deployment of resources to highest-risk areas; test 100% of transactions for many controls; and help with sample selections in cases where 100% of transactions is not possible.
Experience with data analytics will: reduce time spent on lower-risk and less complex areas; reduce travel expenses; minimize disruption to the business during the execution of internal audit reviews; and potentially reduce fees in subsequent years.
Thanks to automation, auditors can: benefit from time saved that can be reallocated to more value-added activities; leverage data analytics for internal and external benchmarking; gain the ability to generate more relevant background information for audit reports; and shift the mentality of the internal audit team from compliance to business insight.
To learn more on how to get your data analytics program started, download the recording of our webinar, Building a Data Analysis Program.
About Bob Cuthbertson:
Bob Cuthbertson brings a wealth of accounting, auditing and technology experience to his role as Chief Operating Officer at CaseWare Analytics. Prior to starting the analytics division of CaseWare in 2000, initially as CaseWare IDEA Inc., Mr. Cuthbertson was Vice President, Professional Services, of The Canadian Institute of Chartered Accountants (CICA). Mr. Cuthbertson is also a CPA (Ontario) with a specialty in Information Technology (CITP), granted by AICPA, and holds a Bachelor of Commerce degree from Queen’s University School of Business.
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