Why the "The future of Auditing & Risk Management" is no longer what it used to be !!!!
Off late, professionals in the field of risk management and auditing have started experiencing an interesting phenomenon of a different future then what was perceived by the thought leaders in this field to be the future.
One of the key challenge being changing business dynamics as well as the expectation from the profession. Gone are days when Auditors were just" watchdog" and not a "blood-hound". But with increasing compliance and expectation worldwide have lead to auditors to start act as " blood-hounds"
One area particularly which became an offshoot of this was fraud risk to an organization.It is important in today’s world for auditors to be proactively involved in Fraud detection and prevention with the help of techniques of data analysis.
The techniques of data analysis help in transformation of audit fundamentally and also improve our approach towards audit. Traditional Audit is a cyclical process which involved assessing and testing controls, identifying control objectives, performing tests in a manual manner also sampling population being considerably small to measure control effectiveness. Auditors being proactive helps in carrying out number of activities that help in acquiring better quality of data which in turn results in better analysis and final output.
Fraud Analytics is an analytical process that gives insights from operational, financial and many other internal as well as external electronic data. It could be Real time data or even historical data which is usually risk focused.
To conclude, its results help us to identify key risk areas, errors, misuse, fraud, verify process effectiveness, improve business efficiency and also influence business decisions.
Will be discussing more on Fraud Analytics and related auditech in future posts.
Internal Auditor @ PNB Housing Finance Limited
8 年Attended the recent FAFP Session it was like an eye opener or a reality check! there is so much to learn and gone are the days of the ticking & matching. techniques approach as well as mindset needs to change! but the fact is that mostly CA's(specially those in practisce) are not ready to invest in these practisces! they still prefer the age old techniques!
Risk management | ITGC | SAP Audit | Fraud detection using AI/ML
9 年Well said. Auditors have to embrace technology for effective audit. Things have changed, but lot more needs to be done. Needless to say that data analytics reduces cost and at the same time increases efficiency and effectiveness of audit/fraud identification. I agree with your comment on 'blood hound', particularly with respect to internal audit.
Vice President Sales Operations and Enablement at Hexagon ALI
9 年Until the next Enron makes headlines and the government surges back with new requirements and auditing. While data analysis is definitely key, what is found still needs resolved/mitigated and retested.
Cloud and Emerging Technology Risk| CISA | CRISC | Banking and Finance Domain
9 年There is no doubt that data analysis techniques would play increasingly important role in auditing. Still the accountability of the auditors as remarked by Lord Justice Lopes in Re: Kingston Cotton Mills Co. (1896) case will still remain as watch dog and blood hound.