The role of an auditor has changed rapidly over the past decade. Big data is now allowing auditors to make better decisions, while at the same time making that process more complicated. Today, future financial auditors must process a strong background and skillset in IT in order to keep up with the industry trends.
Big Data Presents New Opportunities for Auditors
The Cloud Security Alliance (CSA) was formed in 2010. The goal of this program is to educate industry leaders about cloud computing and big data. According to a recent CSA report, the financial industry has been heavily impacted by big data and cloud computing.
While many professionals in the financial industry utilize the cloud to do their job, auditors rely on this platform the most. Nearly 40% of all professionals that participated in the survey were employed as auditors.
The financial industry has always been very data centric. However, auditors in other sectors will leverage big data as well. Large healthcare providers will rely heavily on big data to identify ways to improve patient outcomes.
How is Big Data and the Cloud Being Used to Improve Risk Analysis?
The Dodd Frank Wall Street Reform and Consumer Protection Act and other financial regulations focus almost exclusively on the risks incurred from financial transactions. This is partially due to the fact that auditors didn’t have other data to study beforehand. These policies may be revised as auditors expand their actuarial duties.
Auditors can use big data to conduct new forms of risk analysis. Companies store massive amounts of data acquired from social media, email, texting and mobile apps. Both internal and external auditors can use this information to understand some of the risk elements in the company.
They can provide better recommendations to address security threats and employee compliance risks. These issues include:
- Assessing the risks of company BYOD policies
- Monitoring the effectiveness of non-disclosure agreements (NDAs)
- Identifying employees that may be violating company ethics policies
- Analyzing causes of medical error in the healthcare profession to formulate new solutions (this is particularly important since the passage of the Patient Protection and Affordable Care Act, which penalizes healthcare providers with high patient readmission rates).
While big data enables brands to identify areas for improvement, it also enables regulatory auditors to assess compliance. Brands that violated protocols will need to address these problems to avoid future fines.
Microsoft, 3M and other brand leaders are already incorporating big data in their risk management strategies. They expect big data will play an even more important role in the coming years.
Heightened Need for Data Security
Since internal and external auditors will be relying more extensively on big data, protecting data will be more important than ever. Brands will need to have the right security protocols in place to ensure the data isn’t compromised. This includes investing in technology to monitor the networks and taking other precautions.
Since big data will play an even more important role in audits in the future, auditors will also need to monitor data security. They will need to work with the company security officers to establish a set of security guidelines and make sure employees comply with them.