For decades, companies have recognised the benefit of using data analytics for internal audits. With the amount of data available in today’s modern, ever-connected world, making data-driven decisions, especially about crucial business processes like corporate governance, compliance and risk management, only makes sense.
So, what’s the delay with integrating data analytics into the internal audit process? Even with companies recognising the numerous benefits of data analytics, progress has been quite slow.
Currently, data analytics is used by auditors for specific and somewhat limited purposes like creating engagement plans, undertaking fieldwork, identifying anomalies or testing controls. Deloitte’s 2017 report Evolution or Irrelevance? Internal Audits at a Crossroad explains the importance of integrating and properly embedding data analytics into auditors’ approaches to achieve the best results.
Many obstacles prevent the integration of data analytics, but perhaps one of the biggest challenges is the current market skills gap. At present, 58% of IAs have only basic experience with data analytics, which means that most struggle to adequately respond to or identify risks within their company using a data-driven approach.
Given that organisations expect to integrate data analytics into every aspect of their internal audits within the next three to five years, IAs certainly have some catching up to do.
The Benefits of Mastering Data Analytics for IAs
“With great power, comes great responsibility.”
Before the rise of data analytics, auditors relied on information gained from executive meetings and limited sets of financial data to conduct internal audits. Over the last decade, data analytics have become more advanced and as a result, it’s now possible for auditors to gain more profound insights and increase their predictive capabilities.
Auditors can harness data analytics, by embedding it into the internal audit process, to capture untold benefits for companies and help their organisations achieve new heights. So much so, that 53% of UK IA leaders believe understanding and using technology, like data analytics, directly contributes to IA’s value to their organisation.
Data analytics allows IAs to streamline the internal audit process so that it can be completed within a shorter timeframe and at a lower cost to the organisation. Auditors can more quickly make connections between different datasets, which means they can focus on more profitable areas like strategic risks. The insights gained through data analytics also helps organisations to stay at the forefront of innovation and maintain a competitive edge.
Other benefits include:
- Better quality audits
- Greater efficiency
- Improved assurance
- Greater audit coverage
While there are indeed many advantages to implementing data analytics, it’s often difficult for companies to find internal auditors with the right skill set and experience.
Recruiting Internal Auditors with Data Analytics Experience
One of the most significant issues for companies looking to recruit internal auditors proficient in data analytics is the lack of suitable candidates. Companies need auditors that can work with and understand large datasets and as such, there is a growing need for well-qualified auditors. This present situation negatively impacts organisations and audit professionals.
A PWC report shows that 53% of participants agree that not improving the adoption of technology within internal audits will hinder IA’s value to their organisation. As such, internal auditors need to step up and develop the necessary skills so that they can continue to have a valuable role in their company.
Required Skills for Internal Auditors
Companies want internal auditors that can generate data-driven insights to transform outdated auditing processes. CEOs and board members also need IAs that can advise them on best practices and develop strategies for integrating data analytics into the company’s routine business processes. At the same time, internal auditors should also be able to manage any risks associated with data processing.
With auditors playing such a pivotal role within the operation of companies, it’s relatively unsurprising that 60% of PWC respondents reported that they expect to see IAs as trusted business advisors within five years.
Recruitment Market for Internal Auditors
Auditors with data analytics and data assurance skill sets are very desirable candidates and as such, they are in a unique bargaining position when it comes to securing employment opportunities. DataConsulting even goes as far to call IAs with data analytic skills the “rock stars of the profession.”
Candidates that don’t have experience with data analytics may want to consider upskilling as it could help them to progress their careers and increase their ability to compete for choice positions.
Speak to a Change Internal Audit Specialist Today
Here at Change Recruitment, we’re currently looking to fill some fantastic internal audit vacancies. If you have the suitable experience for the following roles, speak to one of our internal audit specialists today and let us change the way you feel about your job. Or, browse other risk and compliance roles here.