Data analytics can enable internal audit teams to deliver faster assurance and more incisive insights for an organization’s leadership to act on — increasingly critical in today’s disruptive business environment. However, in a survey conducted by the Chartered Institute of Internal Auditors (CIIA) and AuditBoard, nearly half (49%) of respondents said the biggest barrier to data analytics progress is the lack of existing skills and resources in the function.
A data analytics-enabled internal audit function is only as effective as its people. To move away from sporadic, ad hoc use of data analytics and fully embark on the journey requires improving internal audit‘s general level of data fluency, software proficiency, and encouraging the team to view the organisation in a new light.
Read on for ways you can help build up your team’s data analytics skill set, then download Embracing Data Analytics: Ensuring Internal Audit’s Relevance in a Data-Led World to learn more about developing your audit analytics strategy.
Strategy 1: Training vs. Recruiting
One common upskilling approach is to invest in training, but like a foreign language, skills and insights are quickly forgotten unless put to immediate and frequent use. Another option is to recruit. But is it more effective to hire a data analytics-capable auditor or a dedicated analytics and data science specialist with coding skills? Each approach has its strengths and weaknesses.
Strategy 2: Recruiting Internal Auditors With Specialized Knowledge
Auditors are already familiar with business processes and risk controls, know the expectations of the third line and have the necessary qualifications to perform their duties. A talented data analytics specialist will be able to apply sophisticated analytics and visualisation techniques and even build apps, but may not intuitively understand the risk implications of their analysis or how to interpret data findings.
“Data analytics people are not always great at translating the data. We need to work more closely with the analytics experts and then make sense of the findings and translate it into operational language that the board and other senior stakeholders actually understands.”
-Head of Audit & Customer Service, Nationwide Supermarket Chain
Strategy 3: Recruiting Data Analytics Specialists
On the other hand, specialists can share their expert knowledge with enthusiastic and engaged auditors, who in turn can share with their colleagues, democratising data analytics across the internal audit team. Many have found that recruiting a data guru or building a bench of such specialists promotes a more data-centric mindset. Talented experts can do much more than support audits with deeper analysis than would otherwise be possible, they can code bots and tools for automating tasks and inspire the team to think in new ways. This can have positive compounding effects.
Strategy 4: Leveraging the Broader Organisation
Many internal audit departments lack the budget for additional talent investment and may be expected to make do with what they have. Given the high demand for data analytics skills, recruiting specialists may not always be realistic. This should not dissuade CAEs from encouraging the organisation to invest directly into its data staff and technology.
“An effective approach to getting the resources you need is to partner with the business on a business problem. So you get them to go and ask for the investment with internal audit sitting on their shoulder and saying, ‘We’ll use this, too’.”
-Founder, Audit Analytics Software Provider
The business world is increasingly data-driven. Organisations know they must keep pace by
using data analytics to better understand their customers, their sales strategies and to unlock
growth opportunities and cost savings. A loophole for budget-constrained audit functions, therefore, is to collaborate with the organisation, which is likely to have deeper pockets for investment. Shadowing and secondments can go a long way. Many internal audit teams are making early and rapid progress by simply asking others what they are working on and how it has been developed, absorbing their expertise for use within the third line.
Strategy 5: Learning From Others
Moving beyond the organisation, leverage the progress of the best in the profession by attending the Chartered IIA’s Data Analytics Working Group or other similar meetups in your area. Learn from others’ successes and failures and gain insights into the most effective tools and practical applications, the easy wins and pitfalls to avoid. This sharing of knowledge and experiences is already pushing the profession forward on a number of topics. There is no better way to progress than to hear from those who have already been there and done it.
Above all, audit skills and experience should take precedence. Audit analytics skills are a powerful supplement to internal auditors’ unmatched sense and judgement. It is in marrying the two where the greatest results are found. For more considerations for developing your audit analytics strategy and upskilling the function, download Embracing Data Analytics: Ensuring Internal Audit’s Relevance in a Data-Led World from the CIIA and AuditBoard.