Did you know that many auditors and internal controllers still base their work on samples?
What use is a sample size of 25 for a population of over 1 million transactions?
Today we no longer have to rely on samples because tools such as ACL and Qlik enable us to take 100% of transactions - be it customers invoices, customer payments, supplier invoices, supplier payments, inventory movements, fixed assets movements or journal entries - and review all of those transactions for suspicious activity or errors.
Samples are still important. But samples should only be taken on exception lists, and not on raw data.
If your internal or external auditors are still relying solely on samples of raw data, then you can challenge them to find out why they are not using data analytics.
Today there is no excuse because all of the data analytics tools are on the market and easy to use.
Make sure you get the most out of auditors - especially the external audit- and get the most for your audit fees, by ensuring today that your auditors use data analytics.
Furthermore, if you want to have more visibility over what auditors are doing, you can request that they present the results of audits to you in the form of dynamic dashboards, such as those in Qlik. In this way, you can navigate through the audit report, drilling down to the detail, in order to review quickly in a fun way and in order to be in a position to challenge the auditors' work. Remember, Qlik desktop is a free application, and the auditors should be able to give you their work in the form of a Qlik application, that you can then read on your laptop.
The audit profession is rapidly changing in order to integrate data analytics. This change is an opportunity that you can seize in order to get more for your fees.