Choosing the Right Analytics Tools For Your Audit team
Thru our conversations with many internal audit teams, we realise most audit teams are currently integrating analytics into their audit procedures, or they plan to do so in the near future. In response to this, the next question is often, “How can we get started?” The first question I would ask instead, "What do you hope to gain from these analytics?"
In my experience, generally, auditors and audit management explain what they wish to get out of an analytics program in one of two categories: management analytics or audit testing analytics.
Management analytics such as Tableau, or Power BI, usually offer a high-level view at the data and the ability to slice and dice it for different perspectives or to drill down into the details. Standardized dashboards are often developed to document recent performance against KPIs or previous month, quarter, and year results. This type of reporting is highly useful for senior management.
On the other hand, Audit testing analytics, such as #Arbutus, generally refer to examining the data and seeking out anomalous patterns. This is usually done after the anomaly has been identified. Suppose, for example, we want to find any duplicate invoices, or invoices that have been paid by the same individual who prepared them and authorized payment.
Sometimes, the anomaly is unknown, for instance, if we are looking for transactions with unusually high dollar values, or transactions that are unique because they are the only ones that follow an unexpected pattern. Such analytical techniques are employed to assist in the substantiation of the audit.
Management analytics and audit testing analytics have some overlap, particularly because management analytics tools can also be utilized to perform some audit testing. Management analytics tools tend to focus on visual representation. An audit testing analytics tool focuses on testing like the identification of duplicates and outliers, the Benford analysis, and other tests auditors need to perform.
It is advisable to choose a tool like #Arbutus, that can support your analytics focus, or sometimes, we do advise customers to use a combination of multiple tools if you will want to achieve both objectives.
Last but not least, most teams who embark on this path realize they need more than just a single analyst on board, so you will need a tool that is able to meet your needs while having the capability to be intuitively easy to use by everyone on the team.