Quality 101
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How Technology and Data Analytics are Revolutionizing Auditing — Part 2

Auditing is undergoing a paradigm shift, influenced by the rapid advancements in technology and data analytics. As organizations embrace more complex, digital processes, how they’re audited is changing.

December 13, 2023

Data analytics and advanced information technology have made some traditional auditing methods outdated, experts say. Instead of these older methods, many audits can now be streamlined through email communications or regular data sharing.

“Data analytics and information technology has both made many forms of auditing obsolete and opened doors to auditing processes and methods that have not existed in the past,” says Timothy McClung, a self-employed test systems architect.  “Many audits can now be bypassed with a simple email or regular data share.”

This shift reduces the need for time-intensive, manual checks. In fact, experts predict that future audits will lean heavily towards algorithm-based and AI process standards.

“Future audits, I believe, will focus on algorithm and AI process standards as that industry moves from its infancy into maturation,” McClung says. “It will become increasingly common, especially when corporations look to add AI into their products and processes, that standards (and therefore audits) will be the backbone of those negotiations.

For this reason, as AI becomes more embedded in products and processes, auditors must ensure that it adheres to established standards.

Remote Auditing: A New Norm

The COVID-19 pandemic gave rise to remote auditing, utilizing video platforms like Zoom and GoToMeeting. While remote audits offer convenience, they come with their own set of challenges.

“The auditor does not need to be on-site, but it does help and is more value-added to the client,” says Timothy Cruickshank, lead auditor and consultant, Quality Audit Solutions. “If I am [in-person], I have the benefits of peripheral vision, and can turn my head to see other things in real-time. You lose that with remote audits and are subsequently more likely to miss things.”

For this reason, remote audits should come at a cheaper price, Cruickshank says, as they don’t offer the same audit coverage.

“When the client is showing the auditor evidence via computer, the auditor gets to see that and only that,” he says. Plus, remote audits are reliant on a good platform connection and typically take longer to view the same information, he says.

Data Analytics: A Precision Tool

Data analytics has become invaluable for auditors. With enhanced analytics, organizations can sift through vast amounts of data to identify negative trends and descriptive analysis, such as dashboards, failure reports, and customer surveys, provide immediate insights.

Diagnostic analysis delves deeper, investigating the root causes of failures and customer complaints. Predictive analysis goes a step further, forecasting future trends to preemptively address potential issues. Such in-depth analytics allows auditors to pinpoint high-risk processes, ensuring more focused and efficient audits.

The improvement in data analytics allows an organization to analyze statistics associated with their processes to identify possible negative trends using descriptive analysis such as dashboards, failure reports and customer surveys; diagnostic analysis, including root cause of failures, customer complaints, and process flow; and predictive analysis, such as improved preventative maintenance programs, industry trends, and procurement needs, says Scott Carey, ISO Certification Manager for HSB Registration Services.

“This allows the internal auditors, second-and-third party auditors to focus the audits on high-risk processes,” Carey explains.

The Versatility of Modern Auditing

One of the most significant advantages of technology and data analytics in auditing is its adaptability. Advanced tech makes auditing possible in challenging environments, while data analytics boosts auditors’ detection of organizational inconsistencies.

Andrae D. Maze, ISO sector manager, quality assessments, Smithers, says that technology and data analytics shape the future of auditing practices.

“Technology is improving the ability of audits to take place in environments that historically would be too volatile because of extreme climates, atmospheric conditions, safety hazards, or any extreme exceptions that would question the safety and/or integrity of the auditor or audit,” Maze says. “Data analytics give auditors an enhanced ability to comprehend trends and patterns of the organization making it easier to identify deficiencies and anomalies.”

As manufacturing and quality control becomes increasingly digital, auditing is increasingly enmeshed with technology and data analytics. Together, these tools promise more efficient, precise, and adaptable auditing processes.