ENDEAVOR E-MAGAZINE ENDEAVOR | Page 76

WORLD ACADEMY OF INFORMATICS AND MANAGEMENT SCIENCES
ISSN : 2278-1315
An initial SWOT analysis is simply a list of strengths,
algorithms is to streamline processes that were formerly done
weaknesses, opportunities and threats. The significance or
manually.
potential value/cost of each item is not considered in the
The result is a dashboard of aggregated, summarized data
initial analysis, and the items are not ranked in any order of
relating to each contributing agency. This allows auditors to
importance.
easily access information and drill down as they need to. The
A problem with SWOT analysis is that it can encourage
common format allows for easier extraction of data, and also
very long lists of strengths, weaknesses, opportunities and
the checking of anomalies and outliers. The analytics program
threats, without any differentiation between those that are
can create “red flags” to draw a matter to an auditor’s
significant and those that are fairly immaterial.
attention.
Having prepared an initial SWOT analysis, the next step is
In the VAGO, the system is still in its development phase. The
to interpret it.
dashboard system will be used in conjunction with traditional
Interpretation involves identifying those strengths,
auditing methods for a complete audit cycle. The two methods
weaknesses, opportunities and threats (SWOTs) that might
will then be compared and assessed, and any problems with
be significant, and what their implications might be for the
the analytics methods will be identified and addressed.
future. The process of interpretation therefore involves
The first wave of clients involves 35 agencies across the range
ranking the SWOTs in some order of priority or importance.
of government entities, which includes departments,
Another problem with SWOT analysis is that it can be used
universities, councils and others. Second and third waves are
to identify significant issues, but it cannot be used for
planned, with improvements to the system being made as
evaluation. It cannot be a substitute for a more rigorous
more experience is gained.
strategic analysis.
Auditors’ Focus on Risk
While resources and competences are necessary to compete
“The aim is to free auditors from mechanical tasks so they can
in a market and deliver value to the customer, unique
concentrate on what they really need – and want – to do,
resources and core competences are needed to create
which is auditing,” Jiang says.
competitive advantage. Therefore, having identified the
“They can focus in on areas of risk that the analytics have
most significant issues facing the organization, strategic
flagged, such as classes of transactions. Ultimately, it will
management should then consider:
allow for better performance benchmarking and resource use
a. How major strengths (for example, core
as well as auditing oversight.”
competencies) and opportunities might be
To get the most from the analytics system and the dashboards,
exploited, to obtain competitive advantage
additional staff training will be needed. While auditors are
b. How major weaknesses and threats should be dealt
generally very pleased with the prospect of not having to
with, in order to reduce the strategic risks for the
perform routine data collection, processing and checking, the
entity.
new system requires some new skills and a different mindset.
Data analytics requires a large amount of computer processing
power, so this led to a rethinking of the IT system at VAGO.
Institute of Chartered Accountants of Nigeria (ICAN)
Safeguards also had to be built into the IT changes to ensure
Management, Governance and Ethics
data security.
© Emile Woolf International, September 2014
Jiang notes that the software packages used to design and
operate the new system are Microsoft SQL Server, Qlik Sense
HOW DATA ANALYTICS IS TRANSFORMING AUDIT
and Python.
By DEREK PARKER
“We are aware that we are writing the rulebook rather than
(The auditor of the future will use data analytics to check
working through an existing one,” he says.
data of much larger sets of information from a wide variety
“Especially in relation to performance auditing, I think we are
of agencies. Data analytics is allowing auditors to check
just scratching the surface. And we take the view that
much larger amounts of information and focus on areas of
analytics is meant to supplement and improve auditing.
risk).
Analytics is the first post of auditing, and then human
The auditor of the future will use data analytics to check
experience, insight and judgment take over”.
data of much larger sets of information from a wide variety
It is however believe that, technology is impacting on the
of agencies, according to Ben Jiang, director – data analytics
global financial sector, and these changes can be applied to
in the Victorian Auditor-General’s Office (VAGO).
any jurisdiction worldwide. Therefore, companies,
“It once would have been impossible to analyze all of the
organizations, government and other corporation and the
transactions of a large agency”, Jiang told CPA Congress in
business community should be awake to subscribe in and
October 2018.
perform optimally without restriction.
“The traditional approach of sampling was necessary in its
time but now the volume of transactions is so high that
HOW FINANCE TEAMS CAN ARGUE FOR A
analytics technology has to be the way to go”.
TECHNOLOGY UPGRADE
A major advantage of analytics is that the contributing
By JAN MCCALLUM
agencies can provide data in almost any format. Clients
06/11/2018
lodge their data, usually monthly, through a secure portal.
INTHEBACK
Copyright 2018 CPA Australia Ltd
Algorithms for Data Analysis
Jiang’s team has written a series of algorithms to transform
the material into a common format for analysis, as well as
(Start by documenting the challenges your team faces on a
run checks for completeness. The aim of the
day-to-day basis. Too expensive, when will you find time to
www.waims.co.in
ENDEAVOR 2019 | WAIMS ACADMIC PRESS
76 | P a g e