Embracing data analytics
About the report
This report aims to encourage internal audit to fully embrace data analytics and support the organisation in doing the same. Data-empowered senior management are more risk aware and can make smarter, swifter decisions. For internal audit, data analytics enables faster assurance and more incisive insights for the organisation to act on. The case for adopting a data-led approach has never been more urgent.
To explore how the profession is progressing in its use of data analytics and AI/machine learning, the Chartered Institute of Internal Auditors hosted three roundtable discussions in August 2022 on the topic, in which members shared their insights and experiences. Building on this, we sat down with senior internal audit executives at three organisations that have either demonstrated instructive progress in their data analytics journeys or are applying these techniques at an advanced level.
Organisations represented include: abrdn, An Post, Barclays, Deloitte, Flutter Entertainment, HSBC, Irish Life, Legal & General, Lidl, Lloyds Banking Group, Met Office, Novuma, Phoenix Group, Post Office, Scottish Midland Co-operative Society, Skipton Group, SWAP Internal Audit Services, Technology4Business, The Government Internal Audit Agency, The Open University. This qualitative research was combined with a quantitative survey that was run during September as a pulse check of data analytics and AI adoption and the perceived maturity of these applications within internal audit functions in the eyes of 298 respondents.
Key findings
- 60% of internal audit functions are already using some for of data analytics, an additional 7% having advanced to AI. However, this still leaves a third yet to adopt data analytics.
- The top three risk areas for using data analytics are financial (62%), fraud (17%), and legal and compliance (6%).
- The top three benefits of using data analytics include greater level of assurance (48%), 100% audit coverage (21%) and enhanced efficiency (14%).
- The top three barriers to fully embracing data analytics include lack of skills (49%), lack of resources (24%) and lack of time to implement (12%).
- Only 17% expressed concern that internal auditors could be replaced by robots in the future. Instead, data analytics and AI can free up internal auditors’ time to focus on strategic and systemic risks that could be coming down the track.
Related content
Training: The changing world of audit - artificial intelligence
Research report: Data Analytics
Technical guidance: Auditing data governance
Technical guidance: Data analytics, data mining and big data
Technical guidance: How to audit algorithms
