By: Karen C. Miller, Ph.D., CPA; Santhosh Abraham, Ph.D.; and Danielle Brannock, CPA, CSPO
While the use of data visualizations may not be new, it can be a revolutionary tool for internal auditors. Even Albert Einstein (1879-1955) noted, “My particular ability does not lie in mathematical calculation, but rather in visualizing effects, possibilities and consequences.” Looking back at the past decade in the accounting industry, we find data analytics and visualizations at the center of change and impact. If a renowned physicist recognized the value of visualization effects amidst complex mathematical calculations and theories of relativity, how much more can we as accountants leverage this technology to enhance audits?
While visualizations are beneficial to both external and internal auditors, the role of internal auditors to assess risks, identify operational inefficiencies and provide insights creates a unique opportunity to utilize audit analytics. The broad tasks, frequent access to business data and less strict regulations of an internal audit create increased demand and flexibility for using analytic tools. Visualizations should not be limited to telling a story at the completion of the audit. Rather, internal auditors can leverage visualizations in all parts of an audit, from planning to execution to follow up. While using data analytics to assist with audit planning and execution may seem like the obvious application in an internal audit, auditors may be surprised to find how these visualizations can play a critical role in building relationships with stakeholders. Providing audit evidence and transparency throughout the audit process utilizing observable data visualizations can increase stakeholder engagement and confidence in the internal audit and may improve the “buy-in” of the results and recommendations from the stakeholders. Perhaps this stakeholder engagement is the new frontier of analytic applications that accountants desire, especially in internal audit.
Learning From a Leading Fortune 500 Company
Insights from an exploratory field study with internal auditors at a leading Fortune 500 company in Tennessee reveal the use of data visualization techniques incorporated into their internal audit process. Internal audit team members ranging from associates to directors participated in interviews specifically about their usage of data visualizations. Based on the findings, visualizations often begin as exploratory in audit planning, evolve into fine-tuned key visualizations during testing and ultimately become aesthetically pleasing final deliverables for stakeholders. A key outcome of this organization’s integration of visualizations is better communication with stakeholders, resulting in improved partnerships and a more rewarding audit experience for all parties involved, which, in its essence, increases stakeholder engagement. Looking at the findings of this field study can help internal auditors shift their focus from implementing the bare minimum of analytics to maximizing their use of analytics in a way that yields positive outcomes for both auditors and stakeholders.
Communicating With Stakeholders
The first way to increase stakeholder engagement is to embrace the concept of “communicating with stakeholders” instead of “communicating to stakeholders.” Instead of one- way conversations where a visualization is only used during the read-out, internal auditors can benefit from engaging with stakeholders along the way and treating them as the end users of their visualizations. Interviewees at all levels of the Fortune 500 company’s internal audit department referenced the importance of using visualizations to improve communication throughout the entire audit process. The use of visualizations at this organization plays a significant role in enabling better “socialization” with stakeholders through an agile auditing process that includes continuous meetings to engage the stakeholder throughout the audit process. Visualizations in these agile meetings provide clear visibility into trends not easily seen in raw data and build better credibility for audit management and audit findings. Multiple auditors referenced the importance of visualizations to increase dialogue of audit scope that can be used to drive data instead of data being used to drive audit scope.
This organization uses visualizations to track and facilitate audit planning and improved communications between the auditors, managers and directors. For example, Alteryx, a data analytics platform, presents code as a flowchart, providing great visual documentation of the audit workflow that can be used to facilitate audit planning and completion. One auditor noted the use of visualizations to analyze trends in the risk assessment phase by creating buckets from the entire population to identify outliers. These visualizations can reveal trends or risks not easily seen in the raw data, making insights more interpretable for stakeholders. Another interviewee noted, “when we’re socializing issues, (visualizations are) beneficial even though our audit customers want to see every detail. They also want the snapshot. … The visualizations are very helpful, especially if they know that we are pulling from a full population. And it … allows them to see it in a way that’s more usable and digestible And so, it helps build credibility.”
Visualizations in dashboards show the stakeholders a snapshot of the data while also allowing users to interact and drill down into the details of the data, thereby improving the receptiveness of the client and improving the desire from the client to maintain those dashboards for continuous improvement and monitoring. These internal auditors utilized both Tableau and Power BI dashboards during the testing phase to collaborate with their clients. The auditors noted that many are using dashboards, but not all use them effectively where they can significantly improve dialogue around audit findings and help stakeholders easily “consume the analysis.”
Another interviewee provided an example where visualizations created a more receptive buy-in process when a stakeholder incorrectly assumed they were close to achieving a target goal: “(When) they gave us the numbers in Excel, we put them into a visualization. We found that it (target) wasn’t close. So, we had to put that in front of them. And then they were willing to admit that it was an issue. And once we all agreed it was an issue, it was then, ‘Okay, how do we fix this issue?’”
These examples reveal the importance of using visuals during the testing phase of the audit to improve the communication between the internal auditor and the stakeholder, leading to improved understanding and acceptance of findings. The chief audit officer interview perfectly summarized: “You can’t simply throw analytics over the fence to clients when you need to be engaging in a collaborative effort to identify and improve weaknesses and processes.”
Through ongoing communications, relying on data visualizations to tell the story of the audit progress, stakeholders are taken on the journey with the auditors and are better situated to accept outcomes when audit findings are issued.
Expanding Usability
Ongoing communication, implementing stakeholder feedback in visualization design, and treating the stakeholder as the end user of a visualization sets up data visualizations for robust usage, rather than simply a static image embedded in a read-out document. When data visualizations are crafted with the stakeholder in mind (and not just a statistical visual to document a finding), they can be leveraged for more than a one-time audit purpose. In fact, internal auditors are encouraged to approach designing data visualizations with the “sky as the limit” at first. The one-off static dashboard can be modified to strategically support ongoing refreshes and timely updates. When incorporated into a continuous auditing or monitoring program, business processes can be more efficiently managed with near-real-time insights for stakeholders into how their area of the organization is faring post-audit.
Multiple interviewees explained how these visualizations prepared during the audit can then be used by stakeholders to continue to maintain and monitor their business processes. An interviewee explained how she not only shared the analytics and visualizations from the internal audit, but she also created a training video to explain how the analytics and visuals presented in a dashboard could benefit both the client and the internal audit team in subsequent reviews: “And (when I provided) the data that we found in the dashboards that we built … I made a video recording … of my screen and me talking them through the process of how we created it, what data we used, what we used it for and how they may use it.”
The interviewee noted this is not a required part of their role as an internal auditor, but their organization encourages the internal audit department to “lean into the skills of your auditors and your clients,” which creates the desire for clients to learn new analytic and visualization skills that can be used for collaboration.
Accordingly, interviewees noted how visualizations improved the relationship between auditors and stakeholders through effective communication that placed the stakeholders as a joint business partner instead of just an auditee, leading to better stakeholder participation. One interviewee shared how stakeholders with some understanding of data visualization tools are more likely to accept the findings and even follow up with additional data and visualizations to show their perspective of the risk. Another interviewee expressed how visualizations are being used more in the audit reporting phase as a part of “socialization” with stakeholders. Two other interviewees reported how using visualizations to tell the right story creates a partnership with the stakeholder and provides a rewarding experience for the auditor to see the “light-bulb moment” for their stakeholders. One said, “(With) visualizations that really get to the story, we tell the right story. … (Then) everybody’s in like, ‘Oh, we’ve got to fix this.’” Said another, “We give the customer a voice. And what we found is that when we (communicate) every week, every two weeks, when we get to the final report, they’re not blowing up at us and not going crazy because they’ve been given visibility into what we’re looking at throughout the process. … We get to show them through visualization. That gives us much more reward as auditors because then you can see that light-bulb moment.”
Just as Albert Einstein noted the importance of visualization effects on possibilities and consequences, these auditors testify to the importance of visualizations in collaborating with stakeholders to improve the effectiveness and efficiencies of their organization. Treating audit stakeholders as end users like these examples can strengthen the relationship between both parties of the audit by making stakeholders feel valued. Gone are the days of internal auditors being the police. This generation’s internal auditor walks a line between independence and trusted advisor, and what better way to support your stakeholders than sharing all the work you did along the audit journey for them to benefit from in the future?
Redefining the Reporting Phase
Ask any internal auditor what the biggest bottleneck is in the audit process, and writing the audit report is likely to be among the responses. In fact, management-level interviewees at the Fortune 500 company noted that timing is an issue with reporting findings in a detailed report that needs multi-level approval. Using data visualizations to improve the efficiency of the internal audit report can alleviate bottlenecks in the reporting process. Interestingly, all participants interviewed referred to the redesign of the audit report at this organization to include more visualizations to share findings more efficiently and to improve communications.
One interviewee noted the difficulty in writing a single report that benefits all levels of stakeholders. Interestingly, slide decks became a pivotal tool in continuous communication for this organization through agile auditing, which allowed the team to create a standardized process that allowed the slide deck to grow with the dialogue that involved all stakeholders. This new reporting worked so well that the company began establishing protocols and templates for the different types of stakeholders and processes, including international reporting. Data visualizations with drill-down capabilities are embedded in the templates.
“Social analysis” became a phrase associated with this reporting. According to one interviewee, these visualizations made the reporting process more efficient and flexible. While the slide decks are beneficial for business management stakeholders, they are also reviewed by high-end management stakeholders. Another interviewee followed this up by noting the increased buy-in of high-end stakeholders, such as the executive and the audit committees, when reviewing slide decks with drill-down dashboard capabilities. With the use of a standardized template, stakeholders across the company know what to expect from the internal audit process. When using a standardized template that is customized to the stakeholder with custom-built data visualizations of their business processes, the stakeholders know they are more than just another tick box in the annual audit plan. They are valued, and their view of an internal audit shifts to one of higher engagement. While the in-depth written report to the audit committee and executives is still important, the new reporting method with the evolving slide deck and embedded visualizations provides the ability to drill down into the data and findings in a way that tells the story that catches the attention of these executives and often minimizes the response time for decisions that must be approved by those executives.
The organization’s new best practices around audit reporting and data visualizations can be a lesson in continuous improvement for internal auditors everywhere. This reporting process redesign is credited to the post-COVID environment where internal audit teams had to learn to pivot quickly, with more efficiency, more focus on agile auditing and more focus on continuous communication with clients.
Increasing Engagement
As data analytics continue to become the expected, internal auditors are positioned uniquely to find ways they can leverage analytics, like data visualizations, to create unique value for their organizations. The internal auditor feedback from this organization should be an encouragement to other organizations with a desire to streamline the assurance process, enhance client and stakeholder relationships, and expand opportunities for more value-added feedback to clients. The culture and tone of the organization plays a significant role in the adoption and use of analytics and visualizations. The internal auditors interviewed in this exploratory study reap the benefit of upper-level management that challenges the auditors to find better ways to leverage analytics and visuals. In addition, upper-level management benefits from young technologically savvy auditors who find reward in developing their analytical and visualization skills.
Lessons learned from the leading Fortune 500 company show how increasing communication to be cyclical and ongoing, expanding usability to leverage visualizations for continuous auditing and monitoring, and redefining the reporting phase to create both clear expectations and customized content for stakeholders can result in increased stakeholder engagement. The leading Fortune 500 company reporting these visualization findings noted improved communication and socialization with stakeholders where stakeholders are more likely to embrace findings, generating improved partnerships and a more rewarding audit experience for all parties. All of this because internal auditors decided to think differently about how they implemented data visualizations. They certainly raised the bar.
About the Authors
Karen C. Miller, Ph.D., CPA, is a university professor of accounting in the McAfee School of Business at Union University. Her primary teaching emphasis is systems, analytics and cost accounting. Miller is the accounting discipline coordinator for the McAfee School of Business and manages accounting internships. She is actively involved in promoting the TSCPA Discover Accounting seminars. She can be reached at kcmiller@uu.edu.
Santhosh Abraham, Ph.D., is the associate dean and a professor of accounting for the McAfee School of Business at Union University. His primary teaching emphasis is external and internal audit. Abraham sponsors students annually through participation in global internal audit internships. He can be reached at sabraham@uu.edu.
Danielle Brannock, CPA, CSPO, is a manager of internal audit data analytics at Intuitive. She is a data analyst and digital accelerator with extensive experience in automation, process excellence and data analytics in the audit space. Brannock is co- author of “Accounting Information Systems: Connecting Careers, Systems, and Analytics,” published by Wiley, and a public speaker in the analytics field. She can be reached at Danielle.Brannock@intusurg.com.
This article was originally published in the March/April 2025 Tennessee CPA Journal.
