Tax & AccountingFinanceComplianceNovember 23, 2018

Same audit technology – Different results

I talked my good friend Matt into joining the Sports Club/LA with me – quite the upscale Los Angeles health club. If you’re envisioning lots of chrome, mirrors, spray tans, $15 smoothies, aspiring actors, and A-listers with their personal trainers; you have the right picture.

I bought new workout gear (certainly one must look the part) and I “hit the gym,” as they say, with some regularity. It worked…sort of. By the end of March, Matt and I had lost a combined 25 pounds (Matt lost 30).

How could that possibly be? I gained 5 pounds and Matt lost 30? We joined the same club, at the same time, and had access to the same equipment, trainers, and classes.

I like to tell that story as a set-up to one of my favorite topics – effectively leveraging audit technology. Now, more than ever, internal auditors are implementing technology with the goal of driving efficiencies into their departments. However, just as joining a gym won’t necessarily get you in shape, the mere license of audit technology won’t make your department more effective.

As I crisscross the globe each year speaking at dozens of leading internal audit conferences, I’m fortunate to be able to speak with hundreds of auditors. A recurring conversation is what I call Same Technology – Different Results. Whether it’s an audit management system or a data analytics tool – within the span of 5 minutes, I’ll speak with one CAE that’s realized incredible efficiency gains with Product X and then another CAE that says that very same Product X was a complete bust and waste of valuable department resources. When I hear tales of these disparities, it reminds me of that workout gear that’s sitting idle in my closet (and seems to have shrunk).

More importantly, these technology usage disparity conversations also remind me of the very first research topic TeamMate tackled back in 2012 as part of our newly formed TeamMate thought leadership program. This program was designed to leverage the access we have to over 110,000 internal auditors from over 3,000 organizations that are using TeamMate’s technology daily.

Released in 2012, our first TeamMate thought leadership research paper, Enhancing Audit Technology Effectiveness, indicated a simple 5-step framework that was critical to the successful deployment of any audit technology. Not only does this 5-step framework for technology success still apply today, but with the increasing pressures on internal audit to deliver more with less, this framework is perhaps more important than ever. I challenge you to ask yourself: “Am I maximizing my technology investment?” If you, like 78% of audit departments, feel there is room for improvement; I urge you to consider these 5 key practices:

  1. Convey the Right “Tone at the Top”

    Having the right leadership “tone at the top” was cited as the single biggest factor for enhancing technology effectiveness. The CAE sets the technology priorities, provides clarity about the anticipated benefits, and obtains technology budgets. Without senior leadership driving the technology investment, it is unlikely an audit department will ever maximize a return on investment. Ask yourself: “Does my CAE make technology a strategic focus for the department?” If not, you need to help make this a priority – and we have some powerful materials to help you. Check out our research paper, Developing an Effective Internal Audit Technology Strategy.

  2. Make the Use of Technology Mandatory on Every Audit

    Our TeamMate research indicated that those organizations that mandate the use of technology tools on every audit maximize their long-term investments. A perfect example is data analytics. There are many organizations that mandate the use of data analytics on every audit, and if you don’t use analytics on an audit, you must indicate why not. Technology skills can fade quickly when not used. I can name 100 departments off the top of my head that have licensed a leading data analytics tool (whose 3-letter acronym will remain anonymous) that has turned into expensive shelf-ware. Be honest, do you have some “unused gym clothes” sitting in your corporate closet?

  3. Hire Technology Skills Selectively / Have a Technology Champion

    There are two important takeaways here. Firstly, you should consider hiring outside talent with strong technical skills in areas such as data analytics or data mining to jump-start implementation of major technology initiatives. Secondly, and perhaps more importantly, is the need to have a technology champion in your department that’s responsible for challenging manual processes, training new users, implementing new releases, and promoting overall tool usage. Depending on your department size, this can be a part-time or full-time role. We have an excellent article titled, Technology Champions: Key Strategic Enablers, that I encourage you to read. Based on my recent conversations with leading audit departments, having a technology champion in your department is a critical imperative.

  4. Train, Train, Train

    Our experience indicates that training does more than any other practice to help utilize technology more effectively. Those departments that invest in formal training vs. “on-the-job” training are more than twice as likely to have most of their staff fully proficient with the department’s technology. Ask yourself: “Is the training I have for new hires or new releases adequate?” Keep in mind:

    • Technical skills fade quickly if they aren’t used
    • New versions of software often require updated training

  5. Measure What Really Matters

    Almost 80% of audit departments lack the performance measures to track productivity gains from the use of technology. Our experience indicates that a solid program of technology performance measures may very well be the missing link to enhancing technology effectiveness. Metrics can include an analysis of the following (pre and post-technology):

    • Length of audits
    • Days to issue draft audit reports

    • Timeliness of issue follow-u

    • Time to prepare audit committee reports

    • Timeliness of audit file review

    • QAR results

Demonstrating the efficiencies gained is a critical component of obtaining a continued budget for training and investment in emerging audit technologies.

Are you getting the maximum return from your technology investment? Revisiting this topic has me fired up. Let me find those gym shoes.

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