BIG DATA OPPORTUNITIES AND RISKS John Whitehead and Evelyn Wareham Internal Auditors Association 18 November 2014

John Whitehead, Chair CNZM. Former Secretary to Treasury. Former Executive Director, World Bank Stephen England-Hall Chief Executive Officer, Loyalty New Zealand Limited John Roberts Director, Relationship Management, Department of Internal Affairs Evelyn Wareham General Manager, Customer Insights, Analytics and Research, Statistics New Zealand Paul O’Connor Founder, Director and Head of Research & Development, Datamine James Mansell Director of Innovation and Strategy, Ministry of Social Development Joshua Feast CEO and co-founder, Cogito Miriam Lips Professor of e-Government, Victoria University School of Government David Wales Manager, Analytics and Insights, Performance Hub, Treasury

Big Data is big because: – Increasing & automatic sensing systems – “Living” through the internet – Potential to change our understanding of the world – Potential to underpin social change The big data revolution: – Is about linking and sharing data – To create new knowledge & support innovation – It’s also about the related talent, technologies & relationships needed for positive change

What we heard – hot topics Privacy – how much of my information do you have? what are you doing with it? How do I know? Access – there should be free access to government data ("its ours"), lack of awareness of what is currently available Inclusiveness – concern about a digital divide, winners and losers, lack of basic skills to navigate privacy and control, lack of understanding of the possibilities

What we heard – hot topics Opportunities – huge potential for industry, lots already underway, excitement Capability – a shortage of talent in quite specific areas, and not well connected Data quality – if everyone has access, data quality may decline and it will be misinterpreted Data sovereignty – capturing the gains for NZ, concern about international private sector giants

Next Steps –Response and Action This is where I hand over To my colleague… …Evelyn Wareham

The Latest What we’ve seen since this July…

15 Chaos and crime prevention Internet of thingS…

Quantified Self…

Better Public Services “We want to use data to drive the results we are after – understand where to put effort, what is effective” Data at the heart of the public sector reform agenda

Data – what’s in it for auditors? Analytics to detect anomalies Monitor risks (Security, privacy) Business intelligence Leveraging potential?

Reimagining Auditing in a Wired World “The profession needs to achieve a “quantum leap” to redesign audit processes using today’s technology, rather than using information technology to computerize legacy audit plans and procedures.” “Existing auditing standards that are the framework for audit procedures need to be modified to incorporate the concepts of Big Data and “continuous auditing” and encourage auditors to use technologies that increase assurance beyond minimum required levels.” Emerging Assurance Technologies Task Force of the AICPA Assurance Services Executive Committee (ASEC), August 2014

“The sources of evidence have changed so dramatically that there can be no way that the profession will not use it. The more difficult prediction is when this change will happen. … It will not occur overnight but will be more ad hoc and evolutionary, and changes in audit practice will continue to occur as corporate processes change.” Miklos Vasarhelyi, Director of the Rutgers University Accounting Research Center & Continuous Auditing & Reporting Lab

OAG Annual Themes 2012/13 – Our future needs – is the public sector ready? 2013/14 – Service delivery 2014/15 – Governance and accountability 2015/16 – Investment and asset management 2016/17 – Information Data quality and use (possibly including health) Capability and capacity to analyse and manage information Changes in information management systems and practice Collaboration with the public to collect and use information Evidence-based decision- making Cyber-security

Conclusions and Key Messages

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Questions?