Managing Risks Using Analytics Essay

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Data touches every aspect of our day-to-day life, and with the advent of big data, companies are relying on data analytics to make informed decisions. According to Ernst & Young, analytics is hindsight, insight, and foresight of a company using data. Top-performing companies utilize analytics five times more as compared to lower performers who are more inclined to intuition. The tangible benefits of using data analytics include direct cost savings and improved performance. According to a recent internal audit survey by Ernst & Young, 80% of companies use data analytic during their internal audit life cycle to monitor a company’s financial health. The foresight that analytics provide is crucial in managing financial risks.

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Since data analytic can predict the future, risks potentially leading to losses can be determined and averted. When data is analyzed, sales managers can optimize sales effectiveness through data-driven insights. Sales reports and trends showing the product, zone, and division performances are created using analytic systems. This information is used by the sales managers to see where sales are not good, and loss preventative measures are then applied. Since reports and dashboards from an analytic system are immediate, hundreds of hours spent consolidating data are also saved (Ernst & Young). Therefore, analytic systems can give insight into business performance and prevent business losses, which are perceived as a business risk.

Using analytics as part of a comprehensive program throughout the audit life cycle rather than on an ad-hoc basis is the way to go. Embedding data analytics into the audit plan can help monitor the company’s financial health by providing the risk assessment and results that add tangible value to the business. Businesses, therefore, stand to benefit from using analytics as a way of managing risks.

Work Cited

Ernst & Young. “Agile Analytics. What Is Your Data Really Telling You?” PowerPoint Presentation.

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IvyPanda. (2022, February 21). Managing Risks Using Analytics. https://ivypanda.com/essays/managing-risks-using-analytics/

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"Managing Risks Using Analytics." IvyPanda, 21 Feb. 2022, ivypanda.com/essays/managing-risks-using-analytics/.

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IvyPanda. (2022) 'Managing Risks Using Analytics'. 21 February.

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IvyPanda. 2022. "Managing Risks Using Analytics." February 21, 2022. https://ivypanda.com/essays/managing-risks-using-analytics/.

1. IvyPanda. "Managing Risks Using Analytics." February 21, 2022. https://ivypanda.com/essays/managing-risks-using-analytics/.


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IvyPanda. "Managing Risks Using Analytics." February 21, 2022. https://ivypanda.com/essays/managing-risks-using-analytics/.

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