Effective adoption of internal audit analytics in financial services institutions

Effective adoption of internal audit analytics in financial services institutions

Given the surge of big data and the belief that traditional notions of IA testing are no longer sufficient in providing assurance, embedding analytics into internal audit plans has taken root. New economy business models, disruptive technologies, and ever-increasing expectations by global regulators have elevated the importance of effectively applying analytics to IA.

A recent global survey of 240 chief audit executives of financial services institutions foreshadows a dramatic increase in the use of advanced analytics. The research shows that about 20 percent of the surveyed participants are using advanced analytics in at least 75 percent of their audits, with that number expected to double in the next three to five years.

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The path forward

While traditional IA functions may leverage analytics to select samples, extrapolate results, or identify exceptions, insights- driven auditing goes beyond this basic process in order to better address business issues and risks and provide new and valuable insights to management. It can help IA professionals ask the right questions, improve confidence in audit results, and identify the most appropriate actions.

While few organizations are on the cutting edge right now, our experience suggests that insights-driven auditing will become pervasive among leading companies by 2020. Soon, effective IA departments will integrate analytics as a core capability across their function and throughout the audit lifecycle. By acting now, IA leaders can get ahead of this trend, generating valuable new insights and more effectively help their business to navigate the future.

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