Embracing Data Analytics: Ensuring Internal Audit’s Relevance in a Data-Led World

Data is vital to making risk-aware decisions in today’s volatile environment. Without a clear understanding of how their organisation is handling systemic risk — supported by accurate data — stakeholders may be met with unanticipated poor business outcomes. According to a CIIA survey of internal audit functions, more than two-thirds of respondents are using some form of data analytics, but nearly one-third are not using any at all — and of those using data analytics, many are still in the early stages. Of those applying analytics, 69% are doing so on a planned but transactional basis and only 3% report being at the furthest end of the maturity curve with fully optimised analytics adoption. By not developing its data fluency and analytics capabilities, internal audit faces a potential credibility crisis. Digitalisation was accelerated by the pandemic. Internal audit must accept this reality by viewing the organisation, its activities, and risk controls through a data lens, and integrating data analytics to enhance its service delivery. Failure to do so will mean internal audit is in danger of losing relevance. A joint report from the CIIA and AuditBoard, Embracing Data Analytics: Ensuring Internal Audit’s Relevance in a Data-Led World, examines the current state of data analytics in internal audit and identifies areas of opportunity as well as challenges to progress.