Embracing Analytics in Auditing

Internal audit has started the journey towards enabling analytics in audit processes, but there’s a long road ahead. Learn why in this report on key findings from Protiviti’s 2017 Internal Audit Capabilities and Needs Survey.

In a digital world, now is the time for internal audit functions to embrace analytics. This is the most significant takeaway from Protiviti’s 2017 Internal Audit Capabilities and Needs Survey, the results of which show that chief audit executives (CAEs) and internal audit professionals increasingly are leveraging analytics in the audit process, as well as for a host of continuous auditing and monitoring activities.

There is growing recognition that an “analog” approach to auditing is not a tenable long-term strategy for advancing the function into a higher-level role helping the organization understand and manage risk.  Structured data is plentiful in all organizations – CAEs are feeling a responsibility to find the valuable insights, efficiencies and issues buried within. On the positive side, a majority of organizations are employing data analytics in their audit processes in one way or another and see significant value in its use. Yet as we explore in our special section, most are in the early stages of maturity and competency.

More than 900 internal audit professionals participated in Protiviti’s 11th annual Internal Audit Capabilities and Needs Survey to assess data analytics capabilities and practices among internal audit functions, along with the top priorities for CAEs and internal audit professionals this year. The survey was conducted globally and the majority of the responses came from North America.

In addition to the 2017 study’s special focus on data analytics, the Protiviti report includes sections on general technical knowledge; audit process knowledge; and personal skills and capabilities. In these section, data analytics, continuous auditing and emerging technologies stand out as areas for CAEs and internal audit professionals to improve their knowledge and expertise.

Overall Notable Findings:

• Data analytics is gaining a foothold in internal auditing – Two out of three departments utilize analytics as part of the audit process.
• Most internal audit shops are still in their “analytics infancy” – A strong majority judge their analytics capabilities to be at the lower end of the maturity spectrum.
• The more mature analytics capabilities are, the greater value they’re perceived to deliver – Organizations with more advanced analytics capabilities in the internal audit department see greater value coming from data analytics.
• Cybersecurity, cloud, mobile tech and big data are top-of-mind – These and other technology-related risks dominate the priority lists for CAEs and internal audit professionals.
• Business and digital transformation is drawing more attention – Not only is this a much higher priority compared to prior years, but its effects are infiltrating most audit plans and activities.