Building a Sustainable Analytics Function

Study after study has shown that data analytics is effective and efficient at detecting risk and identifying control weaknesses, non-compliance, and inefficient business processes.  Chief Financial Officers (CFOs) and Chief Audit Executives (CAEs) have repeatedly stated that data analysis expertise is a much-needed skill, and surveys by the ACFE and CPA firms over the past 10 to 15 years have rated data extraction, data analysis, and analytical software as critical…

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SOX Cost Reductions through Data Analytics

According to the Protiviti report, ‘SOX Compliance and the Promise of Technology and Automation1’ SOX compliance costs have shown year-over-year increases but are starting to level off.  It also states that organizations are beginning to make greater use of technology and automation to support the compliance process.  However, implementing automation in the SOX compliance process is difficult for many organizations.  Understanding and defining requirements, getting stakeholder buy-in, and the investment…

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Unicorns and the Case for Analytics

It feels odd to have to continue to justify the need for and use of analytics.  What can I add that has not already been stated many times over the past 20-30 years?  Studies since the early 1990’s have pointed to the need for businesses and auditors to embrace the use of analytics.  More recently, Deloitte’s 2021 Global Risk Management Study1 recognizes the potential for digital risk management technology to…

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More than Controls

When I tell people that I am an internal audit, three things happen: first I must explain that I am not from the IRS and will not be auditing their taxes.  The second, I must tell them that I do not just focus on financial statements, or fraud, but conduct many types of audits.  This often leads to the third comment, perhaps in jest, “So, you are just interested in…

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The Why Factor

Too often auditors are satisfied with only finding the problem.  In fact, it is usually only ‘evidence that there is a problem’ and not the actual problem.  At which point their recommendations fall short of providing value and helping management improve controls and reduce risk. These types of audits often look something like this: Objective: Verify compliance with “A” Criterion – you are supposed to do “A” Condition – the…

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37-Point Check-up for your ERP

COVID hasn’t really changed things for auditors – it has just brought things to the forefront that we should already have been doing.  Things like: focusing on key risks to the organization, and embracing and maximizing the use of analytics.  This article describes how an audit function can check on the robustness of the internal controls, identify and assess risks, prevent fraud, and provide assurance – remotely – by employing…

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Analytics to support risk-based audit plan (RBAP)

The Risk-Base Audit Plan (RBAP) is an important output of Internal Audit.   Not only is it a requirement of the IIA standards, but it also focuses audit on the most significant risks affecting the organization.  In addition, it gives the Chief Audit Executives (CAEs) everything they needed to determine which audits will be performed and when; and to identify the required audit resources. However, developing a robust RBAP is not…

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See Visualizations

Dave Coderre, RiverAA I have been performing analytics for more than 30 years and I am not sure if it was simply a case of “hard to teach an old dog new tricks” or what, but I never really saw the point of visualizing the results.  If I run an Accounts Payable duplicates test and identify $500K in duplicates and can tell you that it is because of three main…

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Risk, Controls, Entropy, Black Swans, Analytics and RPA

For years I have been thinking about Risk, Controls, Black Swans and Entropy; and more recently about Analytics and RPA.  Only recently did I understand how these are all connected and impact large and small organizations – particularly in activities that are high-risk and strictly controlled.  Sadly, these tightly controlled areas are often overlooked until it is too late.  Which bring us to Risk and Controls. Risk and Controls:  Business…

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The Death of Continuous Auditing – part 2

I purposely made the first title more dramatic than needed to make people understand that Continuous Auditing needs to be looked at from a different perspective.  In fact, it is the original perspective – Risk and Controls – the needs to be adopted.  Unfortunately, the concept of Continuous Auditing transformed into “data analysis” which often resulted in auditors simply reporting errors and exceptions and not tying these back to the…

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