Acl Data Analytics Ebook

Enabling a Sustainable Data Analytics Program
PeTeR MIllaR
ACL Services Ltd.
2009 ACL Services Ltd. ACL and the ACL logo are trademarks or registered trademarks of ACL Services Ltd.
pe T e R M I L L a R
Contents
What can you do to make a difference?................................................................................. 4 Getting Started!.................................................................................................................... 5 Why you need to establish a data analytics program NOW..................................................... 6 The 6 Steps to a successful data analytics program:................................................................ 7 Develop Plan.................................................................................................................. 8 Acquire Data. .................................................................................................................. 9 Analyze Data................................................................................................................ 10 Review......................................................................................................................... 11 Report.......................................................................................................................... 12 Wrap Up....................................................................................................................... 13 Summary. ............................................................................................................................ 14
A recent IIA Survey indicated the global recession is having an impact on internal audit activities.
Survey respondents felt that better risk management could have played a role in preventing the current crisis...internal auditing could have done more to assist their companies in identifying key risks.
For full details, visit the IIAs Global Audit Information Network at www.theiia.org/GAIN
When considering the economic crisis and the role you play as an auditor, what can you do to make a difference?
In the IIA Report, Richard Chambers suggests that audit can help to reduce inefciencies through CAATs and data analytics. To be successful, audit will need to take the following steps:
Get buy-in from management Acquire and reconcile data Make it repeatable
Read on for step-by-step guidelines on how to establish a sustainable data analytics program!
Getting Started!
Obtain Buy-In from Management. Start small and produce high value. Depending on your risk assessment, a great place to start might be with an Accounts Payable analysis. One duplicate payment could pay for the tools needed to implement a cost-recovery program within your organization. Other reviews you can perform for quick and impactful results are PCard Accounts Payable Travel & Entertainment Expenses Acquiring and Reconciling Data. Reconciling your data to make sure its complete is key. For example, we like to think there are no fraudulent people in our organization but if the person were requesting the data from is the one committing fraud, they might be smart enough to give us everything except the fraudulent data/journal entries. Make sure all the data is there. Making it Repeatable. Some may not see the long-term value in technology investments. However, the time and efficiency savings you will achieve by making tasks repeatable will save your organization money and will allow your department to keep up with your workload even with limited human resources.
TIP: Focus on those areas with highest ROI rst, they may recover dollars in areas that are a pain point for management
Why you need to establish a data analytics program NOW

Identify trends, correlations or emerging risks that werent evident Support the need for a business process change Garner support needed to push through that business change Empower both audit and management Cost Savings
The 6 Steps to a successful data analytics program:

1) Develop Plan 2) Acquire Data 3) Analyze Data 4) Review 5) Report 6) Wrap-up
Develop Plan
This first step is crucial to identify audits that would benefit from data analysis. Ask yourself these questions: Is this an area of high risk that would benet from more intensive oversight? In prior years, have steps been taken to conrm that complete data populations have been obtained? Is there a need to focus on particular types of transactions / situations within the larger population? Are the audit procedures designed to look for exceptions? Identify Audit Approach and Schedule What procedures are required to support the audit objectives? Dene the specic data analysis tests accordingly Dene Coverage Desired Consideration of period cutoff Consideration of specic sub-populations (e.g., business units) and / or other specic exclusions Dene Data and Documentation Requirements What data is required to support the audit objectives? Who are the key IT contacts associated with the required data?
Acquire Data
Request and obtain data Develop a standard data request procedure and data request document Key Components of the Data Request Document Overall purpose Cutoff requirements Specic data elements necessary to support procedures Any exclusions required (specic divisions, locations, etc.) Acquisition logistics (data le types, media / transfer methods) Delivery expectations Request for control totals and scripts executed by IT Retain documentation within working papers Obtain and read in data Assess completeness of data Compare data received to control totals provided Reconcile data to source system Determine if proper cutoff has been applied Assess quality of data Identify key elds that contain Null values Records or elds that appear incorrect (e.g., amount elds containing text values, invalid ranges of values, etc.) Records containing elds that exceed a certain value threshold as determined by the internal audit team
10
Analyze Data
Develop and execute analysis logic Considerations Programming standards = Clarity, Continuity, Quality Implementation of scripts / programs = Reusability, Efciency Order of execution can impact processing time / storage Designing to support evidence of procedures performed Review results Identify and seek areas to improve analysis Ensure absence of errors in logic Rene as required
Troubleshoot and Rene Logic
Format Output
11
Review
Develop / adhere to review procedures Considerations Second level of review peer review Technical evaluation of the analysis Review of analysis to conrm that audit objectives have been met does this match expectations? Review of output Were results conrmed with the appropriate business / IT individuals?
12
Report
Interpret results, draw conclusions, prepare report Considerations Summary Memo Outlines the data analysis performed at a high level for the non-technical reviewer. Procedures Performed describes the detailed logic applied in order to execute the data analysis procedures. Flow Chart Documents the program ow when dealing with more complex analysis logic.
13
Wrap Up
Retain analytic documentation Apply data retention standards Review lessons learned & identify future modications
PeTeR MILLeR
Detecting and Preventing Fraud with Data Analytics
14
Summary
Treat your data analytics implementation as a program because software alone will not get you to where you want to go. A successful program must involve people, processes and technology. Engage your organizations people in your program objectives, explaining to them what you are seeking to achieve and what benets to the organization will result. Develop your plan with an understanding that you will need to have recurring access data and have a good working knowledge of the business processes you want to scrutinize. Recognize that you will need to change not only your audit engagement process, but also how you interact with the rest of the organization during the course of audits and in subsequent follow-up. Data analytics technology will help you improve audit efciency and the overall quality of audit results only if your staff knows how to use it. Training and ongoing development are key elements to a sustainable and effective program. The benefits are significant - both in terms of the improved confidence in your audit results and the quality of insight you provide. With a sustainable data analytics implementation, youll improve your overall audit efficiency and consistency of work performed. These are outcomes definitely worth pursuing.

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Enabling a Sustainable Data Analytics Program

Enabling a Sustainable Data Analytics Program

Enabling a Sustainable Data Analytics Program

Enabling a Sustainable Data Analytics Program

Enabling a Sustainable Data Analytics Program

Enabling a Sustainable Data Analytics Program

Why you need to establish a data analytics program NOW

Enabling a Sustainable Data Analytics Program

The 6 Steps to a successful data analytics program:

Enabling a Sustainable Data Analytics Program

Enabling a Sustainable Data Analytics Program

Enabling a Sustainable Data Analytics Program

Troubleshoot and Rene Logic

Enabling a Sustainable Data Analytics Program

Enabling a Sustainable Data Analytics Program

Enabling a Sustainable Data Analytics Program

Detecting and Preventing Fraud with Data Analytics

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