The Age of Data
Data analytics is becoming indispensable in internal audit. Our new report considers the risks and governance challenges this creates.
More data was created in the past two years than the previous 5,000 years. In 2017 we will surpass this in one year alone. As the volume and variety of structured and unstructured data increases, so does its role in business decision-making, the use of data analytics and its importance to audit and assurance professionals. In the latest of our reports exploring this, we focus on Internal audit in the era of data analytics. Combining data and analytics tools can add a new dimension to internal
audit. It can automate processes and improve efficiency, support compliance with existing policies, offer more valuable and comprehensive insights into organisations, help them to anticipate what’s on the horizon and provide higher levels of assurance.
However, organisations should consider the potential influence of analytics on the relationship between internal audit and business.
“Data analytics has the power to transform internal audit, but it brings its own particular risks that need to be managed,” says Martyn Scrivens, chairman of ICAEW’s internal audit panel. Internal auditors need to maintain their independence when using analytics, especially where the source and tools are shared with other business functions. He says: “To do this, data received must not be taken at face value, but should be checked for quality and completeness.”
Effective analysis of data must lie at the heart of internal audits if they are to remain relevant to stakeholders, but this calls for strong governance frameworks. “The roles of data analytics and internal auditors must be separate and clear in order for auditors to take an objective view on whether the data received is a true reflection of the business, and not corrupted or compromised,” says Scrivens.
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Internal audit in the age of data analytics
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