To increase the amount and depth of the analytics performed, steal some agile methods, and apply them to your audits.
If you’re not familiar with agile methods, check out the first 5 topics listed here (just click Next at the bottom of each page; the topics are quick to the point and full of pictures).
Briefly, agile projects are performed in cycles, or iterations, rather than in a long, linear-waterfall fashion, which is: do all planning, then field work, then reporting. Each iteration of the project creates some value and includes feedback, which is used in the next iteration to increase the value of the project.
A while back, a reader named Kyle and I had a conversation about analytics.
It started with his reading my Excel:Basic Data Analytics post where I list a number of procedures that anyone can do in Excel.
Kyle said he was expecting some “super sophisticated process & methodology that works like magic.”
Once your audit team has proven the value of doing analytics consistently, the next question is: Do we create an analytics team and have the team do all (or the majority) of the analytics?
Or should we expect all auditors to develop some levels of analytics proficiency?
Of course, this question often comes a bit further down the trail on the analytics journey, but I think the sooner it is decided, the better.
This is the first post of a 3-part series…
Here’s the 5 things I’m hoping will change in 2018 regarding ACL.
They are all related to each other and feed off each other…
A recent IIA article on building an analytics function in internal audit is dead wrong.
At least on one major point, anyway. And it’s a big one.
As the tombstone reads, this point is D.O.A (dead on arrival, or more specifically, dead on analytics).
The article, Building a data analytics program, requires IIA membership to view, and is located at https://iaonline.theiia.org/2017/Pages/Building-a-Data-Analytics-Program.aspx (that’s actually good, as it means a lot fewer people will ever read it).
If YOUR audit department doesn’t embrace data, analytics, and automation eventually, your audit department will NOT exist.
No data, no analytics. No analytics, no automation. Eventually, no audit department.
Editor Note: This post really applies to all departments in a company, but mainly I’m addressing auditors, but you might want to read between the business lines….
By embrace, I don’t mean have one or two auditors working on this. I mean the entire department.
Before you cite all the regulatory requirements mandating the existence of an audit department in companies, having an audit department in name only won’t cut it.
Having an inept audit department will not be acceptable to regulators, and it shouldn’t be acceptable to company management either. Or Audit Committees!
Companies need skilled and efficient auditors that can do the heavy lifting, and this need will only increase.