The Importance of Analytics to Internal Audit

Internal audit evaluates the performance of various company functions to ensure the effectiveness of risk management, compliance and governance processes. Of course, evaluating anything without quantifiable analytics is extremely difficult, which makes the recording of metrics pivotal to successful internal audit initiatives.

"Data analysis plays an important role within the audit profession," explains Audit Net. "Many audit organizations have made remarkable progress in realizing the benefits of implementing audit analytics and moving towards continuous auditing and monitoring techniques. Much of this progress has occurred as auditors have recognized and overcome the typical barriers to successfully leveraging their data analytics."

There tend to be two core obstacles that stand in the way of companies as they look to integrate their data analytics into auditing activities. First, they struggle to obtain access to the appropriate data to inform their evaluations. Second, they don't know how to incorporate data in a way that enables them to improve processes.

While there are any number of possible solutions to these two challenges, attendees at the World Continuous Auditing & Reporting Symposium (WCARS) suggested a standardized audit data model and audit analytic applications are at the core of the answer. These parameters ensure the availability of data that auditors can then use to evaluate and examine large volumes of transactions and other activities.

As companies look to recover from the economy, the emphasis has been placed on efficiency. Internal auditors should use data in conduction with risk management solutions to improve functions and activities on an organization-wide level.