Data Analytics in Internal Audit

Internal Audit departments are facing increasing pressure to deliver valuable insights and advisory support across their organizations, taking into account competing demands of a diverse stakeholder community. Data analytics has long been held up as the solution for such Internal Audit teams with an ever-growing list of responsibilities without the growing budget to match.

Although the basic concepts of data analytics have remained the same, the practices of leading internal audit departments have been forced to evolve rapidly to keep pace with their organization's evolution. To manage this, leading internal audit departments have adopted frameworks that address the four elements of successful data analytics:

1. Data
   Data accuracy and completeness underpins the effectiveness of all data analytics procedures.
2. Tools
   The library of tools available has become wider and more accessible, allowing capabilities to be combined to maximize effectiveness for the problem in question.
3. People
   Departments need a clear organizational strategy to develop technical talent in their existing internal audit teams, including third party support where flexibility is needed.
4. Process
   Data analytics should be integrated into all stages of your internal audit methodology, with particular focus on a 'data first' approach to understand what will be possible for a given project.

Balancing the requirements of data, tools, people, and process can be a difficult task. However, there are several small steps that can showcase the immediate value of higher quality and efficiency through the use of data analytics in internal audit:

• Selecting and completing a data analytics-enabled audit pilot project with high value and low complexity.
• Leveraging free visualization tools to create interactive dashboards that can be used during multiple phases of the internal audit methodology, including audit planning, scoping, fieldwork, and reporting.
• Understanding existing analytics, visualization, or reporting available within the organization as a low cost, quick way to perform analytics without a large investment in new tools.

KPMG in Japan can help you at any stage of your data analytics implementation, supported by our advisory professionals with both internal audit and technical experience.