Internal Audit Strategy: Focus area four – data analytics
27 May 2022
Data analytics in audit – area four
We’ve been spreading awareness for Internal Audit Awareness Month through introducing the details of our Internal Audit Strategy (2021-24).
So far we’ve looked over:
- An introduction to our strategy
- Focus area one: increasing client engagement
- Focus area two: setting a strategic planning framework
- Focus area three: redesign and modernisation
Focus area four of our three-year strategy
Having a data-enabled internal audit service is more important than ever. Data underpins our clients’ processes, operations and decision making.
Advances in technology have made it possible for audit teams to conduct data analytics more efficiently. Tools allow us to provide real or near-time assurance over and above that provided by traditional techniques.
The Public Sector Internal Audit Standards (PSIAS) say:
“In exercising due professional care internal auditors must consider the use of technology-based audit and other data analysis techniques.“
We can provide a greater breadth and depth of assurances through effective use of data analytics and whole population testing.
What is a ‘data-enabled’ audit service?
When we refer to a ‘data-enabled’ service we mean harnessing the power of data to provide genuine insight.
This means taking all possible opportunities to use data analytics in individual engagements (throughout the audit lifecycle) more strategically.
We want to employ regular, frequent and systematic data analytics as widely as possible while freeing up capacity for shorter, more bespoke reviews.
Our IDEA group
Veritau has been using the specialist data analytics software IDEA for a number of years. IDEA allows a trained user to analyse large and complex sets of data.
Our IDEA group are experts in the software. We use it in a variety of ways, including to:
- Conduct proactive data matching exercises to detect possible fraud and error
- Support additional fraud work – see case study on Covid grants
- Identify data quality issues
- Support different areas of testing in internal audits
Management lead for data analytics
Audit Manager Ed Martin is delivering on this area of the strategy, as he oversees our data analytics function:
Action plan for developing data analytics in audit
As with the other four focus areas of our strategy, we’ve included an action plan to help us achieve our goals. This includes:
- Increasing membership of our IDEA group
- Creating a searchable library of all successful IDEA audit tests
- Using data analytics in key financial systems audits
- Identify areas with potential for continuous auditing
- Participate and contribute to data analytics networks
Covid grants fraud: data analytics case study
Read our case study on using data analytics to find fraud and error in Covid grants system.