1. Better risk management
One of the top benefits of using data analytics for internal audit is that they can improve risk management throughout an organization. Trying to review all data manually typically isn’t feasible, whether you’re trying to analyze accounting practices to spot financial risks, IT records to identify cybersecurity risks, or pretty much anything else.
When an auditor then uses limited data sampling methods to compensate for what would otherwise be information overload, that can leave risk management gaps. Within a full data set, there might be unrealized yet important outliers. Data analytics for internal audit can help you spot and understand these risks by quickly reviewing large quantities of data.
2) Greater assurance
Related to improving risk management, another benefit of data analytics for internal audit is that they can be used to provide greater assurance, including combined assurance. Data analytics can provide a more systematic, complete review of business processes that make it easy to see whether findings from different departments align.
For example, an internal audit team might use data analytics to review financial data, such as transaction logs, to see if there are any anomalies. These results can easily be shared with other departments, such as enterprise risk management (ERM) and compliance, to see if the findings are in sync.
Using audit analytics software makes it particularly easy to visualize and compare results. In contrast, with sampling or other more manual, limited processes, you might not know if you missed something that would indicate whether the audit findings align with ERM’s results.
3) Enhanced efficiency
Not only can data analytics for internal audit improve risk management and assurance, but they can also save time. Trying to review hundreds of thousands of data entries in Excel, for example, can be incredibly time-consuming, to the point that this analysis often isn’t even attempted.
Yet audit analytics software like TeamMate Analytics can review over 1 million rows of data and already has a library of over 150 built-in tests that you can run instantly. From there, the findings can easily be presented in a visual format. Altogether, an internal auditor can use data analytics and audit analytics software to improve their efficiency in terms of planning, conducting, and presenting an audit.