Five Tips for Advancing with Audit Analytics

For many people today, Monday January 5, is the first work day of 2015. We compliance and audit professionals are like our many co-workers and friends in that we have new goals and ideas that we expect should set this year apart. We want to grow and develop personally and professionally and have even greater career success. Inside and even outside of our current roles. But how?

Even more than in previous years, 2015 is shaping up as the year that Analytics will be adopted by the audit and compliance profession, at least according to Internal Auditor, the global professional journal for internal auditors. See article titled "The Year Ahead:2015."

This article quotes several high profile Chief Audit Executives (CAE's) on the subject of Analytics. Raytheon's Larry Harrington, a frequent keynote speaker for the IIA says that "you will see greater use of data analytics to increase audit coverage without increasing costs" and that "internal audit will leverage analytics from other lines of defense," such as compliance and risk management. Increased use of Analytics will lead to greater value from audit and compliance, as measured by management. But if this was easy, wouldn't we all be doing it already? How should we overcome obstacles such as finding the right people, training, and budgets (as cited by the CAE's in this article)

Visual Risk IQ has been helping audit and compliance professionals see and understand their data since 2006. We work with all leading audit-specific tools (e.g. CaseWare IDEA, ACL, and newcomer Analyzer, from Arbutus Software), and also with general purpose analytics and visual reporting tools like SQL, Tableau, Oversight, and more. Importantly, we have completed hundreds of engagements for clients across a wide variety of industries.

These five tips are:

1) Consider skills and experience of the team, not individuals, when planning a data analytics project.
2) Begin with the business objectives in mind, and map from these objectives to available data
3) Understand your data, and explore it fully before developing exception queries
4) Consider outlier, metric, and exception queries
5) Supplement necessary skills with internal or external resources

We'll be expanding on each of these five tips in blog posts later this week, but here is some information on the first and perhaps most important one. Your people.

1) Consider skills and experience of the Team, not individuals, when planning a data analytics project.

As part of our consulting projects, and for our inward assessment of our own team members, we use an analytics-focused Body of Knowledge framework that has the following seven key components.

• Project Management
• Data Acquisition and Manipulation
• Statistical techniques
• Visual Reporting techniques
• Communication
• Audit and Compliance Domain expertise
• Change Management and Strategic Thinking

In our experience, data analytics projects succeed because of project expectations and corresponding competencies of team members in these seven areas. It's especially important to note that these body of knowledge components are rarely (if ever?) found at a high level within a single individual, and therefore a team approach is needed to accomplish successful an analytics projects.

People that have greater skills at project management or communication of issues may not have the requisite technical experience when it comes to data acquisition and manipulation, or statistical techniques. Similarly, it is common for stronger data specialists to be weaker on audit or compliance domain expertise.

So when planning an audit analytics project, be sure that you've built a team that has each of these key elements in their skill set, and that they have the incentives and team structure to work together and learn from each other's expertise.

Tune in tomorrow for more on how to begin with the business objectives when planning an audit analytics project. In the meanwhile, comments and suggestions are welcome.

Joe Oringel
Managing Director
Visual Risk IQ
Charlotte NC