The Fourth “E” Of The Analytics Revolution: Enhance
Enhance [en-hans]: to raise to a higher degree, intensify or magnify.
It’s a fitting definition for one of the five most crucial elements of revolutionizing Internal Audit’s use of analytics.
Many internal audit functions are failing to achieve the transformational change that analytics can bring about. Teams may be using analytics consistently, but the value generated from their analytics use has not been fully realized. For most, breaking through that barrier will require a revolution, not continued analytics evolution. PwC’s clients are finding that five Es are needed to change the trajectory of internal audit analytics maturation; and one of them is to enhance every internal audit resource’s comfort with analytics through training and mind-set change.
The third E—empower—describes the roles Internal Audit needs on its analytics teams such as developers and business analysts. Certainly, such analytics team members need continued education and training. Developers can benefit from technical training in query, database, and analytics tools as well as in specific techniques such as statistical and predictive analysis. Business analysts need training to help them better understand the business and its various processes and to help them think broadly about how data can be applied to risk areas.
Something that many internal audit functions overlook is that every member of the audit team should be trained to adopt an analytics mind-set. It is the building of that kind of mind-set across the organization that will propel greater analytics value realization. What does the term analytics mind-set mean? Auditors with an analytics mind-set are re-seeing each audit through a data and analytics lens. They consider how to incorporate analytics in ways that make the audit more efficient and in ways that change the entire audit approach. For instance, rather than relying on a random sample of transactions, auditors can analyze all transactions during, say, the past three months and home in on patterns and exceptions that might change what’s being audited and how the audit is being conducted.
Training in the use of analytics tools given to auditors who do not have an analytics mind-set is ineffective; it won’t stick. However, building auditors’ understanding of such tools is important once mind-set has been established. Analytics tools have a general work flow that analytics follows: from transforming data to analyzing data, to visualizing data. A variety of tools can be mixed and matched to move through that work flow. Sometimes the most-powerful and most-comprehensive tools come with steep learning curves and lengthy adoption times. And it’s best to focus auditors on tools with the lowest barriers to use and highest values for the immediate need, which may be Excel. Open-source tools, which are readily available and supported by substantial resources for self-serve skill development, can also be good options.
In the building up of the analytics mind-set, business process understanding and knowledge of analytics tools are not onetime needs supported by onetime classes. A curriculum that spans those areas can be developed and regularly refreshed as an analytics program grows and changes. Innovation events, wherein team members are recognized for their successful use of analytics, help keep momentum building and engagement high. With the right training, auditors will become comfortable, enabled, and enhanced in the use of analytics because they achieve understanding of the approach, are supported by management, and acquire the knowledge and capability to execute.
Enhance is the fourth of the five Es that revolutionize the ways Internal Audit uses analytics. Watch for my next post as I continue the analytics revolution series with the fifth E: Execute.