Are you an analog or a digital auditor? Check out these 4 barometers

As I am heading home on this train to the suburbs of Paris, France, reading Big Data by Mayer-Schönberger and Cukier (a must-read), it comes to my mind that big data and emerging technologies truly represent a great opportunity for auditing in a smart way. While some might think of “Old vs. Modern” sort of parallel to oppose status quo vis-à-vis the rise of data and alternative auditing techniques, I lean towards the softer “Analog vs. Digital” comparison which can be illustrated using four simple barometers.

1. Sampling vs. Population Testing.

This is by far the most popular element of comparison. Analog auditors deal with varying sampling approaches. But let’s be honest here, we do not always provide proper documentation of our sampling option. Why 15? Why 25? Why 30, the magic number? Why not 237? Statistical concepts such as interval of confidence, sampling error, extrapolation risk, etc. seem to be ignored and practices vary from one engagement to another. I bet this sticky habit of analog auditors is going to be around for some time, at least until most auditors become data literate, and develop the inclination to look for correlation between a myriad of data, not just from the lens of a sample. The beauty of full population testing resides in the very fact that we deal with true population’s mean, standard deviation, etc., no extrapolation required.

2. Face to Face vs. Online Meetings

Some auditors, including myself, believe in the power of face-to-face meetings. Nothing compares to breaking the ice by dropping a joke prior to the start of the meeting, or commenting on a painting or a family photo. The ongoing pandemic is shaking up this good old way, by urging internal auditors to adopt new options for interacting with audit clients in a pleasant and more “human” way. The reality is that modern communication tools are forcing us to use different means of breaking the ice virtually while engaging with our clients. Let me say this upfront, I am a big fan of telecommunication tools, having experienced the magic of staying abreast of things from distance, while managing a team of data analytics folks from the other side of the Atlantic. Internal auditors must find new ways of making things happen. The unprecedented times we are experiencing are the perfect accelerators. I wonder how true digital auditors succeed in this: how do you throw a sincere and engaging joke without observing the full body language of your counterpart?

3. Report Writing

Analog internal audit reports are thick, with black-and-white paragraphs that present control breakdowns or improvement opportunities and include a myriad of references. In this era of data velocity and visualization, there is less inclination for dense reports. Digital internal auditors are aware that reports readers want to get to what matters the most. Hence, they are moving away from the conventional audit report, using few words and focusing on visualization. 

4. Use of Surveying Tools

It’s surprising to note that some internal auditors still use Microsoft Excel – or worse Microsoft Word – to collect feedback from clients and stakeholders. Then, they spend uncountable hours massaging, analyzing and digesting the flow of data received to gain some insights. This is a bit awkward in an era of speed and especially if we consider the abundance of tools that allow us nowadays to do the same work more efficiently, almost for free or at a low cost.

So, where do you belong? An analog auditor frankly happy with the status quo? An analog auditor looking forward to embracing new ways of doing things? A digital auditor always seeking to stretch the reach? Or just in-between?

About the Author

Rigobert Pinga Pinga, CIA, CPA, CFE, CGMA, is Director of internal audit at the International Organization of la Francophonie. Prior to that he was the data analytics program coordinator for the Internal Audit Vice Presidency of the World Bank Group in Washington, D.C. Prior to joining the World Bank Group, Rigo was Audit Manager at Ernst & Young.

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Disclaimer: Opinions expressed here belong solely to the author, and not necessarily to the International Organization of la Francophonie.