Analytics are a necessary part of the auditing profession, allowing for deeper dives into data and better, more accurate results. Many audit teams are planning to use or are already using audit analytics as part of every audit. This is after realising the significant benefits they can bring.
Data analytics and audit analytics are often confused as being the same thing. So, lets answer the question: what is the difference between data analytics and audit analytics?
‘Audit analytics’ describes the findings found from analyzing information gathered during the auditing process. In the modern age, this is more likely to involve dedicated digital tools, given the advanced capabilities of software.
Such tools can track and analyze huge swathes of text or figures, in a timescale far beyond that of humans. Some software can also present findings in the form of graphs, or actionable insights, based on data.
‘Data analytics’ is less specific to audit analytics, although the same principals are utilizsed. Great chunks of raw data are retrieved and analyzed, to deliver findings and insights. However, unlike audit analytics, data analytics can be used in a number of other scenarios.
As we’ve seen, both use the same processes to extract and analyze information. But audit analytics is a linear form, being dedicated wholly to audit-related information. Data analytics can be used for a wider number of topics. It might be used by marketers to study sales figures, or search for common language found within customer feedback.
So, the difference between data analytics and audit analytics is that the latter is a sub-category of the former. Data analytics can be used in any scenario where useful information can be gleaned from raw data. Whereas audit analytics is solely dedicated to the audit process.For businesses wanting to understand themselves, gather results beyond human capabilities and speed up the process, data analytics is a must.
For anyone concerned by the rise of the machines, auditors and analysts need not worry. Data analytics tools act as a cyber-buddy or digital assistant. They fulfil the menial tasks and allow you to get on with the most creative parts of a project.
Data analytics works as a three-part process:
Data analytics can provide insights into areas of business that were once unobtainable. It’s simply not possible for humans to analyze the same level of data. So, without a software tool, analysts would have to take samples of data and make decisions based on these.
Such decisions would influence an overall business strategy, despite not having all the facts to hand. Data analytics tools enable decisions to be made based on 100% evidence, as opposed to human assumptions. Imagine just how accurate a modern audit can be when compared to methods used in the pre-digital age?
Businesses and auditing firms alike are reaping the benefits of audit data analytics already. Given the accuracy and level of insights that can be gained, this trend is only set to grow in future.
For a deeper understanding of companies and their processes, adopting the best and latest technology is a must. Used by more than 1000 accounting firms worldwide, Inflo software can act as your 24/7 assistant, analyzing and mapping out data analytics for any company, big or small.