There is no question that internal audit has been on a journey. And whilst there have been significant improvements to the work auditing teams have delivered over the last couple of years - largely driven by new regulations - there is still a way to go.
For those in the financial services sector it is also a much-publicised time of fast-paced, significant change, which is leading to increased focus on the area of data analytics and specifically, identifying where greater insight can potentially be gained.
This change is also impacting on the role the audit team plays on project assurance, with it becoming ever more important, and it's these two topics I wish to explore further.
New guidance was issued by the Chartered Institute for Accounting & Auditing in 2013 to ensure the voice of the audit team was heard at board level. To have greater impact and weight, it's important that the team can deliver greater insight.
Data analytics enables this, allowing audit teams to use data assets to identify failures in a project's controls and unidentified risks. Teams are now beginning to move away from simply looking back at what happened to become more exploratory in approach. Considering why it happened, what can be learnt and - most importantly in some cases - what needs to be implemented to ensure it doesn't happen again.
Whilst the topic of data analytics is not new, many companies are still not utilising data to its full potential. Through a benchmark survey we conducted at Deloitte, we assessed the maturity of a number of companies' data analytics strategies. We found that most businesses are still in the initial or developing stage of how they use analytics when auditing, and are in most part a couple years away from when the role it plays is more defined.
Unfortunately whilst this situation progresses at a relatively slow pace audit teams are under increasing pressure from audit committees, regulators and in some cases their own project teams. Therefore I believe that where possible companies need to prioritise and invest in data analytics. For those not sure where to start I would advise they look at what their peers are doing, and even their competitors and clients, so they can consider what of those programmes might best fit their own organisation.
The implementation of regulations such as the Senior Management Regime...