Boards have been warned that the data their companies collect should match the risks they assume to be their highest ranking issues, according to a new report. The report underlines the need for organisations to harvest better data as they face the “strongest economic headwinds for years.”
The new research reveals that a third of organisations may be failing to use data analytics and artificial intelligence to gather information on the key risks they face. This is despite the shadow of economic downturn looming over the UK as it continues to recover from the global pandemic and manages the fallout from Russia’s invasion of Ukraine.
Conducted by the Chartered Institute of Internal Auditors (CIIA) and AuditBoard, a technology provider, the research also finds that the biggest obstacles to using data analytics and AI are a lack of skills, a dearth of resources and a shortage of time for implementation.
According to John Wood, chief executive of the CIIA, the riskier economic landscape places a premium on better data analysis to confirm a board’s assumption about key risks.
‘Myriad risks’
“The aftermath of the pandemic, war in Ukraine and now recession has exacerbated a myriad of business-critical risks. Data is key for organisations to navigate more risky times ahead and it is key for the future of internal audit. Understanding what the data shows about risk resilience in today’s complex environment will help ensure organisations’ success. We urge businesses and internal audit to embrace data analytics.“
The report concludes that around 60% of organisations already use data analytics in some form, mostly to support assessment of finances, fraud, legal issues and compliance.
It concludes that boards and internal audit should make sure organisations have a data strategy; work together to identify the data they do have available and what data could be used to improve risk assurance; how data analytics could be applied to risk assessment; establish a data analytics culture.