Enhancing your audit life cycle through digitisation Taking the - - PowerPoint PPT Presentation

Enhancing your audit life cycle through digitisation

Taking the next steps

February 2020

Welcome

Bram Hostyn

Director | Internal Audit

Timothé Karoui

Senior Manager | Internal Audit

Vincent Gaukema

Senior Manager | Risk Assurance & Data

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Enhancing your audit life cycle through digitisation

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Welcome

Agenda

How can digital solutions add value in each phase

• f my internal audit life cycle?

Which quick wins are out there to gain my first digital audit successes? How do I start the journey towards a more digital internal audit?

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Move the audit approach upside down: start with data

IA on maturity scale

Reactive Business enabler Predictive

Effectiveness in monitoring of key risks Value to organisation

Manual IA function Piloting and ad hoc Sustainable and periodic analytics Continuous auditing Continuous transactional monitoring Predictive analytics

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• Data repository linked to

key systems accessible by Internal Audit

• Dashboards and alerts to

enable IA to monitor exceptions and hot spot areas on a continuous basis

• Key input in defining and

updating the IA plan

• Normality is learned and

relearned on demand using advanced scenarios

• Exceptions to pattern and

subtle risk concentrations exposed

• Proactive and predictive

actions taken

• Auditing is performed using
• bservation, walkthrough
• r hard copy documents
• Audit sampling is statistical

and/or judgmental

• IA function owns analytical

tools such as ACL

• Analytics are run on a one off

basis to address specific audit requirements

• Analytical scripts are

automated and standardized for specific reviews

• Analytics is considered as part
• f scoping for every IA review
• Automated controls are

monitored on a real time basis

• nce and potential exceptions

are flagged to risk and/or controls owners on a real time basis

• Responsibility to operate the

program rests with the

• business. IA are a user and

potentially custodian of the program

How can digital solutions add value in each phase

• f my internal audit life cycle? The audit life cycle

Robotics Process mining Collaboration tooling Audit management / GRC tooling Ad hoc data analytics Risk heatmap Dashboarding Artificial intelligence

Risk assessment Planning Scoping Fieldwork Reporting Monitoring

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How can digital solutions add value in each phase

• f my internal audit life cycle? The audit life cycle

➔ Make your risk assessment more visually attractive. ➔ Allows interactivity and increased efficiency ➔ Easy to get there

Risk assessment Planning Scoping Fieldwork Reporting Monitoring

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How can digital solutions add value in each phase

• f my internal audit life cycle? The audit life cycle

Process mining techniques help audit teams to understand the way processes were executed. Based on data, logged by system users, it ensures information that is: ➔ Objective ➔ Up-to-date ➔ Complete A process mining platform will highlight the most riskful areas of the process, and instantly provides comfort over transactions that follow the expected, controlled process path.

Risk assessment Planning Scoping Fieldwork Reporting Monitoring

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Scoping through process mining

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Fieldwork - exception based auditing

Sample-based Exception-based

Considerations: ➔ Balance between completeness and efficiency ➔ Random sample ➔ Generalisability?

Sample size

Analysed population Further analyse unexpected Analysed expected

Guarantees: ➔ Considers 100% population by focusing on exceptional transactions. ➔ Covers exceptional transactions through bucketing techniques. ➔ Residual risk is quantified in numbers, values and root causes. ➔ Possibilities for reporting and benchmarking. ➔ Possibilities to automate and repeat control testing strategy on full population.

Risk assessment Planning Scoping Fieldwork Reporting Monitoring

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Fieldwork - exception based auditing

Risk assessment Planning Scoping Fieldwork Reporting Monitoring

Data analytics strengthen the IA fieldwork phase... ...with process mining as the most advanced technique to steer your fieldwork into the right direction.

Start-to-end transactional information One-click root cause analysis Effectiveness & efficiency check Objective information Up-to-date information Complete information Strong basis for quantified reporting

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Fieldwork - exception based auditing

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Visualising and executing fieldwork

Manual journal analysis 3-way match reperformance Duplicate payments

Risk assessment Planning Scoping Fieldwork Reporting Monitoring

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Claims & Premiums Analytics

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Demo of dashboard

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Reporting

Is a written report still the way to go in a customer-centric world? ➔ What catches the attention of your audience (AC, Board or management)? ➔ Storytelling with Interactive content ➔ Podcast / short film? ➔ VR reporting? Thinking outside of the box... One thing is for sure, with data analytics your are able to provide clear objective insights and dashboarding.

Risk assessment Planning Scoping Fieldwork Reporting Monitoring

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Monitoring

Risk assessment Planning Scoping Fieldwork Reporting Monitoring

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How do I start the journey towards a more digital internal audit? Guiding principles

Strategy elements

Data Technology People Communication Methodology Capability Business value

➔ Start small & tests ➔ Half a day self-study on certain tools can already be a great start ➔ Build a team of resources with the right skills ➔ Leverage the right technology and develop and re-usable analytics ➔ Develop capabilities ➔ Incorporate analytics throughout the audit life cycle ➔ Coordinate with other lines of defence / define governance

Define your IA Digital Strategy

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How do I start the journey towards a more digital internal audit? Digital upskilling - Merge Technology & Talent

1. Growing a data mindset within your team: ➔ Upskilling your team through 10-20-70 principle: ◆ Training ◆ Coaching ◆ Guided execution ➔ Focus on data-skilled staff with: ◆ Experience in advanced analytics tools ◆ An analytical mindset ◆ A risk & control background ◆ Eagerness to learn

• 2. The acquisition of advanced technologies:

➔ Going beyond spreadsheets and non-visual data analytics. ➔ Invest in latest data techniques like: ◆ Process mining ◆ Visualisation/dashboard tools ◆ Automation

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Which quick wins are out there to gain my first digital audit successes?

The audit life-cycle

Risk assessment Planning Scoping Fieldwork Reporting Monitoring

➔ Risk visualisation via heatmap or

• ther graphics

in spreadsheets

• r dashboards

➔ Collaboration tools ➔ Audit management software ➔ Health check statistics ➔ Process mining demo ➔ Exception- based testing with: Excel, Access, ACL, dashboards ➔ Leveraging fieldwork visualisations ➔ Show live results to management ➔ Periodical reuse of analysis and dashboards created in fieldwork

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Which quick wins are out there to gain my first digital audit successes? Data-enabled fieldwork per cycle

PTP: ➔ Duplicate invoices & vendors ➔ Expenses review ➔ FI invoice analysis ➔ PO changes OTC: ➔ Unpaid or outstanding invoices ➔ Discounts and price conditions on orders or invoices ➔ Credit limit evolution ➔ Customer status (blocked/unblocked) Finance: ➔ Manual journal analysis on time of the day and user types ➔ Review of unexpected journal account combinations ➔ Late journal entries ➔ Maintenance of fiscal periods IT: ➔ User maintenance activities ➔ Transactions and impact generated by powerful IT profiles ➔ Analysis of batch job ownership ➔ IT ticketing review

Risk assessment Planning Scoping Fieldwork Reporting Monitoring

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Key takeaways

Consider data analytics throughout the whole audit life cycle Are you ready to enter the digital era? Merge technology & talent through a 'digital upskilling' approach Move the audit approach upside down: start with data

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Thank you

bram.hostyn@pwc.com timo.karoui@pwc.com vincent.gaukema@pwc.com Obtaining slides and schedule meeting: celestine.bastien@pwc.com

Highlight your Digital Maturity and scope of planned audits

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