While trying to get this blog to appear higher in internet searches, I ran into an interesting article on the Journal of Accountancy discussing Analytic Auditing. The article is written from an external audit perspective and focuses on two benefits. First analytics provides auditors with greater insights into their clients’ business that help to quickly get up to speed on the external audit customer’s business model. Also the article mentions how analytics provide better service to clients.
The article also states a position that I’ve had since learning analytics as an external auditor… that external auditors’ use of analytics lags far behind that of internal auditors. I think a key reason for this is access to and familiarity with data. As an external auditor it took several weeks for me to gain access to a new client system. Once the client granted my access, I didn’t have much time to pull something useful together. Rarely did my projects have more than one or two models. As an internal auditor, I’ve had the same difficulties getting initial access to the system. But once granted access I can continue to develop models as long as my results are useful to the organization. On certain projects/systems this period lasted for several years and allowed for deep exploration and understanding.
To me one of the most impactful sentences from this article is “The profession [external auditing] needs to achieve a “quantum leap” to redesign audit processes using today’s technology, rather than using information technology to computerize legacy audit plans and procedures. ”