Internal auditors are being urged by the Chartered Institute of Internal Auditors (Chartered IIA) to embrace data analytics in order to navigate the increasingly risky, unsure, and volatile times that lie ahead. Businesses are currently experiencing the strongest economic headwinds in years.
The new report, Embracing data analytics: Ensuring internal audit’s relevance in a data-driven world, from Chartered IIA in collaboration with AuditBoard, highlights:
- 60% of internal audit functions already employ data analytics in some capacity, and another 7% have progressed to AI.
- Financial (62%), fraud (17%), and legal and compliance (6%), which are the three riskiest applications of data analytics, are the top three.
- Lack of resources (24%), lack of time to implement (22%), and lack of resources are the top 3 obstacles to fully embracing data analytics.
The advantages of data analytics include increased assurance, audit coverage, and increased effectiveness.
In order to fully embrace data analytics and aid the organization in doing the same, internal audit is urged in this report. Senior management that has access to data is more risk conscious and capable of making quick, informed decisions. Data analytics for internal audit enables quicker assurance and more actionable insights for the organization. There has never been a more pressing reason to switch to a data-driven strategy.
The Chartered Institute of Internal Auditors held three roundtable discussions in August 2022 to explore how the profession is developing its use of data analytics and AI/machine learning. Participants shared their perspectives and experiences. Taking this as a starting point, they met with senior internal audit executives from three companies that have either made instructive progress in their data analytics endeavors or are using these methods at a high level.
