How can my Internal Audit function add more value to business? Can my Internal Audit function be more efficient at a lower cost? Can my Internal Audit activities include a quantitative focus that is less subjective? How do I automate internal audits? How do I get value from the compliance agenda and shift beyond compliance? If the answers to these questions are unclear, you are not alone.
D&A itself is not a new concept, but its appeal continues to rise. Whereas traditional Internal Audit involves manually identifying controls and sampling to measure control effectiveness, D&A enables audits that are more focused on risk-based data gathering and a more efficient analysis of a larger population.
It therefore comes as little surprise that the importance of D&A was rated high (at 78%) in our 2015 survey. If implemented properly, D&A can help an Internal Audit function simplify and improve the audit process to protect and create value.
Against the relative importance of D&A, the average effectiveness of incorporating D&A was rated lower at 46%. This is further evidenced by 60% of respondents who indicated that they are not effectively incorporating D&A in Internal Audit. This acknowledgement by respondents shows that more needs to be done.
To do more, it is critical to recognize and address the barriers to successfully incorporating D&A. The primary barrier we see, confirmed through the survey, is data quality & availability, often due to poor planning. Other barriers include the difficulty of perceived benefits & management buy-in; skilled resources; ability to translate data to insights and funding have also been rated as high.
The barriers to D&A can be overcome by defining a business case for D&A and actions to advance enablement towards the desired end state. There are tremendous benefits when successfully incorporating D&A for Internal Audit and the current climate creates an ideal opportunity for entities to evolve their Internal Audit functions to embody D&A.
D&A is indispensable for world class Internal Audit functions helping to reduce risk, identify efficiencies and drive cost benefits. Internal Audit functions without a D&A capability, risk becoming redundant.
Our 2015 survey offers insights that Internal Auditors can use to compare their functions and focus their efforts as they continue their journey towards repeatable and sustainable D&A.