Automation is crucial for giving busy finance teams the space to develop the reporting insights that create transparency and trust.
8. Internal audit in a digital age
Finance leaders and boards should also ask whether internal audit has the skills and knowledge to deal with emerging and growing risk areas.
For instance, could the internal audit team make more use of sophisticated analytics? This might involve using data and analytics to enable continuous monitoring and quickly reach conclusions based on hard evidence.
Internal audit departments should also look at updating risk assessments, audit plans and audit techniques for the digital age. For example, what would the recovery approach be if heavily automated processes were brought down by a major systems failure?
9. How audit committees provide oversight
Increasing volumes of data, as well as advances in analytical tools and capabilities, have transformed how organizations generate insight. However, they should question whether the information presented to audit committees and boards has evolved in line with these developments, in terms of the sophistication of the content and how it is delivered. With more sophisticated insights, organizations can improve the quality of board debate and decision-making, transforming the effectiveness of oversight.
The survey shows that some organizations – particularly larger ones – are making progress here. Only 19% of small organizations (those with annual revenues of up to US$1b) agree strongly that they are supplying their boards with a management dashboard that gives a close-to-real-time view of reporting and performance, but this increases to 35% for large organizations (those with annual revenues of more than US$10b). Overall, a third of large organizations are making progress in the use of sophisticated analytics to provide boards with reporting intelligence.
10. The way forward
The trusted organizations of the future will most probably have a very different approach to reporting and governance. By combining increasing volumes of data with rapid technological advances, organizations can use analytics to transform their approach.
Their reporting teams should be able to provide rich, multidimensional data in one place, and use sophisticated analytics tools and other technology to deliver the reporting and business insights that are essential to give stakeholders visibility into the business. Board members will probably be able to tap into real-time, forward-looking data that will help them to fulfill their oversight role and reinforce the integrity of the organization.
Realizing this future requires finance leaders and board members to consider three critical action areas:
- Managing finance and reporting data as a strategic asset
- Shifting the finance mindset to embrace technology innovation
- Challenging traditional governance and board structures
The views of third parties set out in this article are not necessarily the views of the global EY organization or its member firms. Moreover, they should be seen in the context of the time they were made.
Our global corporate reporting survey – of 1,000 CFOs or financial controllers of large organizations – explores what finance leaders can do to manage risks and build trust in their businesses.