SlideShare a Scribd company logo

Acl Presentation 3 4 10 Final

M
mcoello

The document discusses how an industrial manufacturing company implemented various analytics projects to enhance their internal audit process, including establishing a data mart, developing computer-assisted audit tools and techniques (CAATTs) to automate testing of purchasing and payables transactions, and analyzing areas like duplicate payments, suspicious vendors, and payments made on weekends. The analytics projects helped the company more efficiently monitor risks, detect control issues, and focus audit resources on exception areas.

1 of 45
Downloaded 96 times
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
Analytics Unleashing the power of the audit process Manuel Coello Continuous Auditing and Monitoring
Agenda 1. Project evolution 2. Establishing a Data Mart 3. An integrated approach 4. Use of CAATTs in Internal Audits 5. P2P – 20 power-packed analytics 6. Other Projects
Background ► Founded in 1843 and based in New Britain, CT ► Manufactures Tools and provides Security Solutions ► 16,000 employees worldwide ► Grew revenue from $2.2B in 2003 to $4.5B in 2008 ► Soon to become $9.5B with the acquisition of Black and Decker
Project History Audit Exchange - Team Extraction collaboration Process – Data CAATTs Mart 150 considered as Projections required 95 97 Management 75 Sponsorship 68 42 29 34 27 21 19 9 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Analytics Team
Establishing a Data Mart
Non-SAP -Entry - Vendor Payments - Goods Receipt Batch - Purchase Orders - Vendor Master Process ACL script Audit Server to import data Web Application Email Notification Audit of exceptions Manual Downloads/ Exchange Re Outside Systems Exceptions su lts posted in Re sharepoint to su - Payroll lts drive accountability Results ACL scripts - T&E - Credit Card for testing
7 day filter File name Example of an import script
Leverage Tables Script Invoice Imports
Scheduling
Integrated Approach -Analysis - Continuous Auditing - Continuous Monitoring
How do we get there? Continuous Entity-wide involvement Auditing Business involvement Business Units Wave 3 Business involvement Mercury for Shared Services Access SAP tables directly Audit Exchange Testing cockpit Wave 2 Design advanced analytics Leverage BI/BW Centralized testing Execute recorded scripts ACL Directlink Testing of automated Processes controls Scheduler SAP training Wave 1 SharePoint Measuring Control effectiveness Collaboration with AutoAudit SOX and E&Y Infopack ACL desktop Edition Auditors following up on certain exception reports Technology Documenting Resolution Full time project manager Metrics Audit Team Transformation Map
CONTINUOUS TESTING OF CONTROLS AND RISKS RESULTING IN: TIMELY NOTIFICATION OF GAPS AND WEAKNESSES IMMEDIATE FOLLOW UP AND REMEDIATION How Test for Benefits Errors - Cash recovery/ Based on exception rules Duplication cost avoidance Design scripts to Control - Drive business be run periodically breakdowns performance using an audit - Immediate software Policy violations remediation Extract Fraud detection - Support transactions and Anomalies Compliance perform analysis of the full universe Unusual - Fraud patterns deterrence
Planning Design Implementation Execution Project Methodology Determine Scope Develop a Project Plan Design Sharepoint Site Document process under Evaluation of review Technology Tools Gather requirements from Develop scripts Analysis of IT key stakeholders Testing of scripts landscape Prepare list of scenarios Develop testing Preliminary discussion Define electronic data cockpit with key stakeholders Execution of test requirements Stakeholder script Review download Training Follow up on procedures with IT Status meetings exception report with stakeholders Document results Business Process in Sharepoint Procedures Update and report results
Approach ► Look for volume, money, risk and opportunities ► Exceptions researched at the Controllership Level ► Partner with a SME in each area with an executive sponsoring the review ► Only exception testing for users – not reporting ► One year data; exceptions strategically selected
Approach ► Why-why analysis focusing on root-causes ► Resolution of exceptions aggressively pursued- remediation oriented ► No formal audit reports issued
Analysis Overview Outliers Abnormalities Trends
Continuous Auditing/Monitoring Payroll T&E P2P 1. Payments beyond 1. Duplicate expense 1. Duplicate Payments termination date submissions 2. Old aged trade payables 2. Multiple changes in 2. Suspicious MCCs 3. Payment terms merit increases 3. Even amounts 4. Duplicate vendors in 3. Unusually high salary 4. High Mileage Master File increases 5. Unusual Items 5. Invoice prior to PO Date 4. Excessive overtime 6. Checks issued by AMEX 6. Split Purchase Orders 5. Multiple or unusual bonuses 7. Split transactions 7. Vendors in OFAC list 6. Duplicate employees 8. Spending trends 8. Non-preferred vendors (name/similar names) 9. Non-preferred vendor 9. PO price differences 7. Salary employees 10. High misc expenses 10. Purchases of even without email account numbers 8. Same bank account and diff clock numbers 9. Employees and vendors with the same address/bank account 10. Employees without the usual earnings or deductions
CAATTs Computer Assisted Audit Tools and Techniques
Audit Area Audit Test Audit Area Audit Test Source-to-Pay Payroll Payments Suspicious invoice sequence Payments Excessive merit increases and WIN awards Invoices falling below approval limits More than one payment per period Duplicate Payments - same vendor and invoice number Payments to same bank account with different names Duplicate Payments - same invoice and amount paid to two different vendor numbers Unusual bonuses Duplicate Payments - same vendor, amount and invoice date Employees without the usual deductions Frequency analysis based on first two digits of payment amount Pattern of continual overtime Payments for even multiples Payments beyond termination date Payments to employees Master File Duplicate/similar employee names Payment runs on weekends Employees with incomplete fields Audit sampling tool Purchasing Purchases of unneded material (E&O inventory) Other Purchase price unreasonably high (using price history) Aged open Purchase Orders Proper segregation of duties in risky financial areas (based Payables Outstanding old debit memos System Access on GRC "rulebook") Old open invoices Terminated employees with system access Vendor Master Match employee and vendor bank accounts Match employee and vendor addresses Fixed Assets Useful lives per SWK policy Search of unusually incomplete fields in the Master File Recalculate depreciation Payment terms not in compliance with DOA Completeness in Fixed Asset Subledger "fields" Capitalization below threshold limits Quote-to-Cash Inventory Recalculate E&O analysis Sales Sales price lower than price lists (price overrides) Recalculate usage data used for E&O Credit analysis and trends Excessive inventory write offs (unusual trends) AR Subledger Collectability analysis Manual Journal Entries (rounded amounts, unusually large Recalculate aging General Ledger entries) G/L and subledger reconciliation Rounded adjustments Customer net credit balances Reversals Excessive write-offs (unusual trends) Posting to "miscellaneous" accounts Customer Master Customers exceeding credit limits Match "key" words (e.g. government, General, etc.) to Payment terms not in compliance with DOA FCPA payment and expense data Countries or customers from government banned lists
CAATT Repository Aged for team allows open payables collaboration ACL Project
P2P Power-packed Analytics
Analytic: Duplicate Payments - Same vendor and invoice number VENDOR_NAME VENDOR AMOUNT_IN_DC DOC__DATE TYPE REFERENCE NORTHEAST UTILITIES 1000244 (1,052) 03/26/2008 XR 00207-0308 Same invoice processed twice. Error by typing NORTHEAST UTILITIES 1000244 (1,052) 03/26/2007 KR 00207-0308 Same invoice processed twice. Error by typing shipping to diff address,two LANCET GLASS LTD 1001707 (1,283) 02/15/2007 XR 50394 invoice shipping to diff address,two LANCET GLASS LTD 1001707 (186) 06/29/2007 KR 50394 invoice AUSTIN HARDWARE & SUPPLY INC 1004581 109 08/03/2007 Typo error in KG 650246 diff credit date and salesman,two invoice date diff credit date and AUSTIN HARDWARE & SUPPLY INC 1004581 (157) 07/12/2007 RE 650246 salesman,two invoice bill payment, one for Aug. one NATIONAL GRID 1014380 (844) 08/30/2007 RE 93009-0907 for Sep. bill payment, one for Aug. one NATIONAL GRID 1014380 (816) 10/02/2007 RE 93009-0907 for Sep. Triple paid. Same bill entered KONICA MINOLTA BUSINESS SOLUTIONS 1029660 (1,516) 08/15/2007 KR 4590557 with different dates Triple paid. Same bill entered KONICA MINOLTA BUSINESS SOLUTIONS 1029660 (1,516) 07/16/2007 KR 4590557 with different dates
Analytic: Duplicate Payments - Same vendor, date and amount TYPE VENDOR VENDOR_NAM REFERENCE AMOUNT_IN_ DOC__DATE BUSA XR 1030888 SIFY LIMITED EXPIMS069 (11,892) 7/31/2008 0700 XR 1030888 SIFY LIMITED 0212254-IN (11,892) 7/31/2008 0700 XR 1035840 K & L Kaine Enterprise 508 (7,424) 7/4/2008 0700 XR 1035840 K & L Kaine Enterprise 608 (7,424) 7/4/2008 0700 KR 1011570 DIV OF WORKERS COMPENSATI INV011508 (4,138) 1/15/2008 0700 XR 1011570 DIV OF WORKERS COMPENSATI 48860-0108 (4,138) 1/15/2008 0700 RE 1015894 ALLIED WASTE 2001786263 (3,580) 9/30/2007 0719 XR 1015894 ALLIED WASTE 0742-001786263 (3,580) 9/30/2007 0719 XR 1011534 KFORCE INC 3247099 (2,349) 10/5/2007 0700 XR 1011534 KFORCE INC 3247099A (2,349) 10/5/2007 0700 Typo or clerical errors
Analytic: Suspicious Vendors using the unbroken invoice sequence VENDNO Vendor Name Invoice in Sequence Invoices Total % Invoices AMOUNT 4742 Wielaard Stellingsystemen 276 324 85% 207,876 7000010 Scan Modul MEDI-MATH B.V. 11 13 85% 107,802 2196 Scan Modul System 1237 1490 83% 5,602,788 2195 ByrumLabflex SA 352 450 78% 14,524,336 60000546 Garmt Design 3 4 75% 31,190 7000011 Scan Modul MEDI-MATH B.V.B.A. 18 26 69% 282,657 4894 VDL Home Tech 10 18 56% 19,124 4714 ADP Nederland B.V. 12 33 36% 6,437 2524 Sueters Interieurbouw 30 96 Our company 169,890 31% 60000076 Athlon Car Lease 20 73 27% 190,309 4693 Etiflex Holland 3 13 is their23% main 8,613 5783100 Projectinrichting van Leeuwen 9 46 customer20% 79,303 3609 Hendriks Techniek Flevo BV 3 16 19% 26,829 4765 Broere Vliegpassages B.V. 3 16 19% 11,785 4761 Sellox B.V. 1 7 14% 5,588 5008 Transverba-Waalex B.V. 2 14 14% 7,726 5026 Café Bar Holland b.v. 1 7 14% 3,288
Analytic: Invoices falling below approval limits Below threshold $2,500 Above threshold $2,500 COCO VENDOR_NUM_C # invoices Amount # invoices Amount 616 52 3,211 1,325,339 311 2,114,353 615 2196 1,169 860,752 405 4,922,257 615 4742 305 122,925 18 84,119 616 2 157 60,238 20 121,198 615 2 113 55,924 2 82,774 615 2195 103 120,273 374 14,472,678 616 4 101 32,933 2 7,728 615 2524 95 78,762 26 95,610 615 60000250 87 53,428 - - 616 60000076 57 11,728 14 173,162 615 4450 56 26,053 15 236,435 615 4165 52 31,145 2 6,395 616 4841 48 11,021 - - 616 Transaction that 60000019 45 77,772 1 3,694 615 may fall under 2160 44 26,207 2 5,108 615 the4924 radar 44 31,137 6 19,812 615 3 43 14,500 1 2,915
Analytic: Payment runs on weekends C_COCO DAY BUY_FROM_VENDOR_NO_ POSTING_DATE NO_ AMOUNT 616 Sun 4 1/25/2009 40N08798 1,421 616 Sun 60000076 1/25/2009 40N08799 12,528 616 Sun 60000076 1/25/2009 40N08800 136 616 Sun 60000076 1/25/2009 40N08801 157 616 Sat 2 1/31/2009 40N08831 10,918 616 Sat 4169 1/31/2009 40N08832 107 616 Sat 4841 1/31/2009 40N08833 213 616 Sat Check runs 1/31/2009 4714 on 40N08837 104 616 Sat 60000076 Saturday or1/31/2009 40N08838 32 616 Sat 4169 Sunday 1/31/2009 40N08839 110 616 Sat 4169 1/31/2009 40N08840 51 616 Sat 2 1/31/2009 40N08841 115 616 Sat 2 1/31/2009 40N08842 80 616 Sat 4914 1/31/2009 40N08843 100 616 Sat 4914 1/31/2009 40N08844 65 616 Sat 4914 1/31/2009 40N08845 72 616 Sat 4911 1/31/2009 40N08846 4,361
Analytic: Purchase of unneeded material Purchases C_SKU INVENTORY QUANTITY_ON_HAND AMOUNT # POs RESERVE PO QUANTITYcontained in Amount the reserve 40852100D 2,372 3 2,372 21,193 8 32 3 2,372 4130127/0 7,663 9 1,916 11,943 5 14 9 7,663 55705 1,373 40 1,373 9,747 2 38 38 1,304 40912100 3,746 4 937 4,683 2 5 4 3,746 2434540 3,638 79 3,638 3,454 2 75 75 3,454 201087 3,162 62 2,530 3,060 1 Purchases of 60 60 3,060 40913200 2,376 2 594 2,376 1 E&O Material 2 2 2,376 C10-RVS 2,629 2 1,315 1,315 1 1 1 1,315 1064720 772 10 386 768 2 10 10 772 4182054 71 2 71 500 4 14 2 71 2064310 126 4 126 315 1 10 4 126
Analytic: Price increases unusually high NO_ UNIT_COST UNIT_COST1 INCREASE % AMOUNT COUNT1 1104521065011131 1,545 2,643 71 1,538,487 32 1004521063011100 1,208 1,672 38 1,381,912 16 1104521065011141 1,545 2,643 71 1,285,581 24 1106521045011131 1,578 2,724 73 1,054,751 21 1106521045011141 1,578 2,328 48 999,083 20 1006521043011100 1,133 1,133 0 770,569 16 2364251 4 12 165 530,446 61 1004509063011100 1,004 1,324 32 405,090 8 1106521054011122 2,963 2,963 0 325,958 6 0002010020000400 249 382 53 315,566 9 2364253 3 4 25 305,292 60 Inflated prices
Analytic: Benford Law Above upper bound
Analytic: Employee and vendor have the same bank account SupplierCode SupplierName IBAN incoterms last_change SupplierAddress C01458 A *nc 20080213 VIA RIVA C00379 B *nc 20080415 VIALE FIUME N.5 6461 C *nc 20080627 VIA ERMINIA MAGGI 23 EMPLOYEE_NUMBERNAME IBAN TOWN ADDRESS 30077 A RANCO VIA CASTELLO INFERIORE 5 12942 B BRENTA VIA CEREDA 2 MFG C CIACCI VIA PILONE 129 Same bank accounts
Analytic: Purchases of even numbers VENDOR_NUMBER AMOUNT_EUROCURRENCY Invoice__ DATE_MOVEMENT NUMBER_MOVIMENT 1491 (156,000) EURO 20081222 20081222 2721867 662 (108,000) EURO 20081126 20081128 2707853 5531 (72,000) EURO 20080923 20081014 2685244 6183 (50,400) EURO 20080702 20080828 2661559 1349 (43,200) EURO 20080929 20081020 2687195 6488 (42,000) EURO 20080625 20080909 2666249 4188 (40,200) EURO 20081126 20081126 2706205 5558 (36,000) EURO 20081127 20081210 2717316 2382 (36,000) EURO Multiples of 100 20081222 20081218 2721610 4398 (34,800) EURO 20080115 20080129 2552247 5739 (33,600) EURO 20080930 20081031 2693394 6470 (33,000) EURO 20081223 20081229 2723274 1503 (30,000) EURO 20080310 20080410 2597341 1503 (30,000) EURO 20080701 20080702 2638885 5547 (25,200) EURO 20081211 20081215 2718998 3664 (24,000) EURO 20080131 20080222 2566762 3664 (24,000) EURO 20080331 20080402 2587714
Analytic: Open aged trade payables Aging Amount Count Less than 6 months 2,014,930 744 6 mo-1 yr 622,949 290 1yr - 2yr 296,229 92 2yr - 3yr 100,000 45 Aged open 3 yr - 4 yr 75,000 48 Aged AP Multiples of 100 payables 4 yr - 5 yr 50,000 25 Greater than 5 yrs 25,000 20 Totals 3,184,108 1,264
Analytic: Analysis of non-electronic payments (checks) Payments Percent Percent # Vendors # Payments Amount per Year of Count of Field 0-4 10,907 70.39% 18.01% 17,212 74,505,538 5-9 1,921 12.40% 13.35% 12,753 59,573,419 10-24 1,920 12.39% 29.30% 28,001 122,172,795 25-49 517 3.34% 18.07% 17,271 119,465,712 50 - 99 172 1.11% 11.87% 11,346 42,806,722 100 - 200 50 0.32% 6.92% 6,613 45,117,170 >200 9 0.06% 2.47% 2,359 36,015,004 Totals 15,496 100% 100% 95,555 499,656,360 Aged open Opportunities to move to ACH payables
Analytic: P-Card Analysis Percent Percent Transaction_Amount Count Transaction of Count of Field _Amount <1,000 48 13% 0% 21,047 1,000 - 4,999 93 26% 4% 259,015 5,000 - 9,999 78 22% 8% 564,232 10,000 - 24,999 70 20% 16% 1,116,768 Aged open 25,000 - 99,999 Abnormal 57 16% 36% 2,484,553 100,000 - 249,999 trend 9 3% 24% 1,619,194 250,000 - 500,000 payables 2 1% 11% 750,510 Totals 357 100% 100% 6,815,318 11 employees Aged open drive 35% of payables the purchases
Analytic: Duplicate Vendors in Master File Vendor Num Status TEST1 TEST2 TEST3 TEST4 0000700184 NOT DUPLICATE 0000700185 0000700186 DUPLICATE DUPLICATE ADDRESS ADDRESS Duplicates: 0000700187 NOT DUPLICATE 1. Same name 0000700189 0000700192 NOT DUPLICATE DUPLICATE NAME TaxID2 Aged open 2. Same 0000700196 DUPLICATE NAME 0000700198 0000700199 DUPLICATE NOT DUPLICATE NAME ADDRESS payables address 0000700200 NOT DUPLICATE 0000700202 0000700204 DUPLICATE NOT DUPLICATE TaxID2 3. Same Tax ID 0000700205 NOT DUPLICATE 0000700206 NOT DUPLICATE 0000700208 DUPLICATE NAME ADDRESS 0000700209 NOT DUPLICATE 0000700210 DUPLICATE NAME 0000700212 DUPLICATE NAME 0000700214 DUPLICATE TaxID2 0000700215 DUPLICATE NAME 0000700216 NOT DUPLICATE 0000700217 DUPLICATE NAME ADDRESS 0000700218 DUPLICATE NAME ADDRESS TaxID2 0000700219 0000700221 DUPLICATE DUPLICATE NAME NAME ADDRESS 11 employees 0000700222 0000700223 NOT DUPLICATE DUPLICATE NAME ADDRESS TaxID2 drive 35% of 0000700224 0000700225 NOT DUPLICATE NOT DUPLICATE the purchases 0000700226 NOT DUPLICATE
Analytic: Use of non-preferred vendors Temp Labor Total Companym 1010 Companym 1020 Companym 1040 Vendor # Amount # Invoices Amount # Invoices Amount # Invoices Amount 0001013617 790,900 14 - - - - - 0001009169 461,444 193 424,998 154 - - - 0001022503 251,848 10 - - - - - 0001011534 164,626 122 15,180 12 - - - 0001028885 105,112 13 - - - - - 0001002872 79,077 29 - - 79,077 29 - 0001011527 68,452 24 31,927 14 - - - 0001031176 64,898 22 - - - - - Business, 0001001894 0001035941 52,669 47,472 18 2 Aged open 2,916 - volume and - 3 - - - - - - 0001034829 41,360 72 41,360 72 - - - 0001034907 0001033046 41,083 38,720 4 25 payables 41,083 frequency - - 4 - 38,720 - 25 - - 0001028798 33,191 14 - - - - - 0001006691 29,486 32 29,486 32 - - - 0001020424 27,997 39 - - 27,997 39 - 0001031818 27,992 16 27,992 16 - - - 0001018005 22,220 1 - - - - - 0001030548 20,463 8 20,463 8 - - - 0001012835 18,018 19 - - - - - 0001008166 17,248 16 - - 17,248 16 -
Analytic: Analysis of Vendor Terms Payment C_Category Amount # Vendors _terms Z006 Non-inventory 90,684,183 2,748 Z035 Non-inventory 52,874,490 2,707 ZD04 Non-inventory 49,866,751 4 ZC99 Non-inventory 24,521,644 201 Aged open Payment terms Z013 Z005 Non-inventory Non-inventory 23,661,948 20,080,190 584 744 by category payables ZC99 Inventory 12,872,017 56 Z007 Non-inventory 12,350,877 186 Z005 Inventory 12,140,090 339 Z013 Inventory 9,099,744 124 Z006 Inventory 8,122,559 631 ZD06 Inventory 6,535,509 1 1 Non-inventory 6,224,268 228 ZD05 Non-inventory 5,123,545 2 ZD04 Inventory 3,317,955 1 1 Unidentified 2,895,549 49 ZD25 Unidentified 2,636,546 1 Z035 Inventory 2,606,600 41 Z002 Unidentified 2,554,497 145 ZD06 Non-inventory 1,668,997 3
Analytic: Vendors with PO Box as only address Percent Percent Stratification Count Amount of Count of Field 0.00 - 9,999 100 69.24% 1.91% 500,000 10,000 - 24,999 200 9.81% 2.47% 5,000,000 25,000 - 99,999 300 11.96% 9.84% 20,000,000 100,000 - 249,999 200 4.66% 11.17% 25,000,000 250,000 - 499,999 50 1.88% 9.78% 15,000,000 500,000 - 1,000,000 250 1.55% 16.43% 30,000,000 >1,000,000 10 0.90% 48.40% 100,000,000 Totals 1,110 100% 100% 195,500,000 Aged open Risk with mid- volume vendors payables
Analytic: Retro Purchase Orders Invoice open Aged date prior to PO date payables COMPANY_CODE ENTERED_BY INVOICE_DATE PO_DATE PO_NUM ITEM_DESC VENDOR_NAME ITEM_NUM 98 SMM0505 3/31/2009 11/20/2009 573041 Not inventory item FASTENAL COMPANY 8431030000 93 KML1025 10/28/2009 10/30/2009 572552 Not inventory item MAIN STREET BANK 8431019200 93 KML1025 10/28/2009 10/30/2009 572552 Not inventory item MAIN STREET BANK 8431019200 98 GDG0831 7/14/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE0685 98 GDG0831 6/30/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE0685 98 GDG0831 7/20/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE0685 98 GDG0831 7/14/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE0685 98 GDG0831 6/30/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE0685 98 GDG0831 7/20/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE0685 93 FJT0722 9/25/2009 9/28/2009 571701 ROD,CONSTRUCTION STAPLE,6.3MM GERDAU AMERISTEEL 167096 93 FJT0722 9/25/2009 9/28/2009 571701 ROD,CONSTRUCTION STAPLE,6.3MM GERDAU AMERISTEEL 167096 91 HJM1203 9/24/2009 9/25/2009 571666 Not inventory item TEKNICOTE, INC. 8431030000 91 FJT0722 9/14/2009 9/15/2009 571344 ROD,CONSTRUCTION STAPLE,6.3MM GERDAU AMERISTEEL 167096 98 SMM0505 3/18/2009 9/10/2009 571204 Not inventory item MSC INDUSTRIAL SUPPLY CO INC 8431030000 98 SMM0505 5/6/2008 9/10/2009 571205 Not inventory item MSC INDUSTRIAL SUPPLY CO INC 8431030000 98 GDG0831 4/9/2009 8/24/2009 570598 Not inventory item AEROTEK INC 8431019100 98 GDG0831 4/9/2009 8/24/2009 570598 Not inventory item AEROTEK INC 8431019100 98 GDG0831 4/4/2009 8/24/2009 570598 Not inventory item AEROTEK INC 8431019100 98 GDG0831 5/7/2009 8/24/2009 570598 Not inventory item AEROTEK INC 8431019100 98 GDG0831 5/21/2009 8/24/2009 570598 Not inventory item AEROTEK INC 8431019100
Analytic: Payment date prior to invoice date Invoice date Aged open prior to payables payment INVOICE_NUM PAYMENT_DATEINVOICE_DATE CHECK_NUM PAY_AMT PA_JE_ CURRENCY ED80740237 20081204 20081209 68653 621.14 PA0006400 CAN ED80740345 20081204 20081209 68653 586.14 PA0006401 CAN ED80740465 20081204 20081209 68653 86.24 PA0006402 CAN ED87039683 20081204 20081209 68653 68.19 PA0006403 CAN
Analytic: Payment prior to due date Invoice date Aged open prior to payables payment VENDOR_NAME INVOICE_DATE DUE_DATE PAYMENT_DATE C_DIFFDAYS1 PAY_AMT JISCO CORPORATION 20080909 20081208 20081124 14 48,375 JISCO CORPORATION 20080908 20081207 20081124 13 39,200 JISCO CORPORATION 20081001 20081230 20081222 8 27,291 BESCO MACH INDUST (ZHEJIANG)CO 20081106 20090105 20081229 7 14,489 KLEAR KUT ENGRAVING 20080930 20081114 20081107 7 3,604 HOLLINRAKE COMMUNICATIONS 20080930 20081114 20081107 7 545 DB ADVANTAGE INC 20080930 20081114 20081107 7 320 MACHINERIE PLUS LTEE 20081209 20081210 20081204 6 621 MACHINERIE PLUS LTEE 20081209 20081210 20081204 6 586 MACHINERIE PLUS LTEE 20081209 20081210 20081204 6 86 MACHINERIE PLUS LTEE 20081209 20081210 20081204 6 68 MERISCA MARKETING 20081121 20090105 20081231 5 2,369 JISCO CORPORATION 20080928 20081227 20081222 5 54,582 BRODIE INC 20081006 20090104 20081231 4 595 MSC INDUSTRIAL SUPPLY CO INC 20081006 20090104 20081231 4 532 MSC INDUSTRIAL SUPPLY CO INC 20081006 20090104 20081231 4 279 NICOLSON CUTTER GRIND & SUPPLY 20081120 20090104 20081231 4 274
Other Projects ► Trade Compliance ► Data Conversions ► Review of employee access to restricted areas ► Review of domains (network access) ► Sales Taxes
PRIOR STATE CURRENT/FUTURE STATE Retrospective Near Real Time Review Review Narrow scope Entity wide Sample Approach Full Universe
PRIOR STATE CURRENT/FUTURE STATE Surprises with control Rapid response to breakdowns control breakdowns Fraud identified by Fraud identified/deterred Complaints / accidently by data indicators Audit tests done Usage of CAATTs manually
Conclusions ► CAATTs uncover issues that could be missed by auditors ► CM&A program proactively protects the company from errors, abuse, waste, revenue leakage, fraud ► The magic is in the data but the value is in remediation ► Audit becomes an agent of change

More Related Content

PDF
Skyward Erp Presentation
vishalnvora1
 
PDF
OpenErp for carpet industry
Gaurav Kumar
 
PPTX
Qms
Andrey Shalaev
 
PPTX
ERP Project Management Primer
sureshgk
 
PDF
Value Reference Model - Quality and Customer Care
Arnaldo Colombo
 
PDF
Overseeing it process implementations with project managemen tv1.0
anusharaju38
 
PDF
Oracle FastForward Flows For SCM - Analyst Briefing
Leah Walling
 
PDF
Comarch Billing Quality Assurance
Comarch
 
Skyward Erp Presentation
vishalnvora1
 
OpenErp for carpet industry
Gaurav Kumar
 
Qms
Andrey Shalaev
 
ERP Project Management Primer
sureshgk
 
Value Reference Model - Quality and Customer Care
Arnaldo Colombo
 
Overseeing it process implementations with project managemen tv1.0
anusharaju38
 
Oracle FastForward Flows For SCM - Analyst Briefing
Leah Walling
 
Comarch Billing Quality Assurance
Comarch
 

What's hot (19)

PDF
IFS Marget Segment Overview
daeager
 
PPTX
2012 11 10 pengantar sistem e audit lpse
The Vision and Insight Corner
 
PDF
Dassian Actual Labor Costing (ALC)
Dassian Inc.
 
PPTX
IT Buzz Overview
Computer Aid, Inc
 
PPTX
IT Buzz Overview
Computer Aid, Inc
 
PPTX
IT Buzz Overview and Detail 9 21 12
Computer Aid, Inc
 
PPTX
IT buzz overview
Computer Aid, Inc
 
PDF
The Waterwise Garden Irrigator Program: A Cooperative Model for Urban Water C...
Danousis85z
 
PPTX
Solution Manager Roadmaps
Tony de Thomasis
 
PPTX
Presentacion Cognos Controller
Luis Barragan Scavino
 
PDF
Winshuttle maersk-casestudy-en
Winshuttle. www.winshuttle.com
 
PDF
Case Studies Using Process as the Lever for Enterprise Change
Vincent Kwon
 
PDF
Product Portfolio Usp June 2009
TrendIC
 
PDF
Kneat Gx Compliance By Design
Micheal_OConnell
 
PDF
R12financialsupgrade22010 12659159458494-phpapp01
Berry Clemens
 
PDF
Dassian Incurred Cost Reporting (ICR)
Dassian Inc.
 
PDF
Automating user provisioning with SAP NW BPM
Balakrishnan Bala B
 
PPT
The Color of Money - Priortization of User Tasks
Len Conte
 
PDF
Composing Business Process with ID-Net
Ang Chen
 
IFS Marget Segment Overview
daeager
 
2012 11 10 pengantar sistem e audit lpse
The Vision and Insight Corner
 
Dassian Actual Labor Costing (ALC)
Dassian Inc.
 
IT Buzz Overview
Computer Aid, Inc
 
IT Buzz Overview
Computer Aid, Inc
 
IT Buzz Overview and Detail 9 21 12
Computer Aid, Inc
 
IT buzz overview
Computer Aid, Inc
 
The Waterwise Garden Irrigator Program: A Cooperative Model for Urban Water C...
Danousis85z
 
Solution Manager Roadmaps
Tony de Thomasis
 
Presentacion Cognos Controller
Luis Barragan Scavino
 
Winshuttle maersk-casestudy-en
Winshuttle. www.winshuttle.com
 
Case Studies Using Process as the Lever for Enterprise Change
Vincent Kwon
 
Product Portfolio Usp June 2009
TrendIC
 
Kneat Gx Compliance By Design
Micheal_OConnell
 
R12financialsupgrade22010 12659159458494-phpapp01
Berry Clemens
 
Dassian Incurred Cost Reporting (ICR)
Dassian Inc.
 
Automating user provisioning with SAP NW BPM
Balakrishnan Bala B
 
The Color of Money - Priortization of User Tasks
Len Conte
 
Composing Business Process with ID-Net
Ang Chen
 
Ad

Viewers also liked (10)

PPTX
6. audit techniques
Syed Osama Rizvi
 
PDF
ACL NYC Conference 2010
mcoello
 
DOCX
Mckinsey kominfo
Mulyadi Yusuf
 
DOC
18021 13-980373375726
chairul_mukmin
 
PDF
audit
riskia rw
 
PPTX
09.1 audit siklus penjualan dan penerimaan
Mulyadi Yusuf
 
PDF
Studi kasus
Rohmad Adi Siaman SST Akt., M.Ec.Dev.
 
PDF
Audit berbasis komputer
Rohmad Adi Siaman SST Akt., M.Ec.Dev.
 
PPTX
ACL
Juan Gabriel Polonia Guzman
 
PDF
Komputer akuntansi dan audit berbasis komputer
Rohmad Adi Siaman SST Akt., M.Ec.Dev.
 
6. audit techniques
Syed Osama Rizvi
 
ACL NYC Conference 2010
mcoello
 
Mckinsey kominfo
Mulyadi Yusuf
 
18021 13-980373375726
chairul_mukmin
 
audit
riskia rw
 
09.1 audit siklus penjualan dan penerimaan
Mulyadi Yusuf
 
Studi kasus
Rohmad Adi Siaman SST Akt., M.Ec.Dev.
 
Audit berbasis komputer
Rohmad Adi Siaman SST Akt., M.Ec.Dev.
 
ACL
Juan Gabriel Polonia Guzman
 
Komputer akuntansi dan audit berbasis komputer
Rohmad Adi Siaman SST Akt., M.Ec.Dev.
 
Ad

Similar to Acl Presentation 3 4 10 Final (20)

PPTX
Sarbanes-Oxley (SOX) Solution
Ragini Communications Inc.
 
PPTX
What is AgentCubed?
harrington129
 
PPTX
(ATS3-APP14) Troubleshooting Symyx Notebook client performance
BIOVIA
 
PPTX
Web dispatching & data collection
Harry Mosesian
 
PDF
Paul Butterworth Policy Based Approach
SOA Symposium
 
PDF
Integrated Business Intelligence and Data Warehouse
Arie Sutiarso
 
PDF
Dell open stack powered cloud solution introduce & crowbar demo cosug-2012
OpenCity Community
 
PDF
Deploying Functional Qualification at STMicroelectronics
DVClub
 
PDF
Benjamin q4 2008_bristol
Obsidian Software
 
PPT
Industrial Automation Services
vinodpandeyaxcend
 
PPTX
Jeff Pascoe - Managing Financial Client On-boarding with BPM
OpenText_ContentDayUK2012
 
PDF
Part2 DC Man Vision and Roadmap Finalcustext
Microsoft Norge AS
 
PPT
Test Automation
nikatmalik
 
PDF
Bridging the gap between pre-production testing and production monitoring
fsyed
 
PDF
Venus-c: Using open source clouds in eScience
OW2
 
PPTX
Avea Release Management IBM Innovate 2012
Oguzhan Ozavar
 
PDF
Lean Logistics Operations Process Map
LeanCor Supply Chain Group
 
PDF
Pre-TechEd EMEA 2012 - SCOM 2012 Down in the cloud
wwwally
 
PDF
Case study marketing
Marpij
 
PDF
OAUGNJ 2013, Product Spotlight: Oracle Financial Close Management
RJ Linehan
 
Sarbanes-Oxley (SOX) Solution
Ragini Communications Inc.
 
What is AgentCubed?
harrington129
 
(ATS3-APP14) Troubleshooting Symyx Notebook client performance
BIOVIA
 
Web dispatching & data collection
Harry Mosesian
 
Paul Butterworth Policy Based Approach
SOA Symposium
 
Integrated Business Intelligence and Data Warehouse
Arie Sutiarso
 
Dell open stack powered cloud solution introduce & crowbar demo cosug-2012
OpenCity Community
 
Deploying Functional Qualification at STMicroelectronics
DVClub
 
Benjamin q4 2008_bristol
Obsidian Software
 
Industrial Automation Services
vinodpandeyaxcend
 
Jeff Pascoe - Managing Financial Client On-boarding with BPM
OpenText_ContentDayUK2012
 
Part2 DC Man Vision and Roadmap Finalcustext
Microsoft Norge AS
 
Test Automation
nikatmalik
 
Bridging the gap between pre-production testing and production monitoring
fsyed
 
Venus-c: Using open source clouds in eScience
OW2
 
Avea Release Management IBM Innovate 2012
Oguzhan Ozavar
 
Lean Logistics Operations Process Map
LeanCor Supply Chain Group
 
Pre-TechEd EMEA 2012 - SCOM 2012 Down in the cloud
wwwally
 
Case study marketing
Marpij
 
OAUGNJ 2013, Product Spotlight: Oracle Financial Close Management
RJ Linehan
 

More from mcoello (9)

PPTX
Analytics for Audit
mcoello
 
PDF
The Role of AI and Automation
mcoello
 
PPTX
2019 gam-mc 2-15-19
mcoello
 
PPTX
Implementing Technological Audit Practices
mcoello
 
PPTX
Continuous Auditing
mcoello
 
PDF
Using Analytics to Audit T&E
mcoello
 
PDF
Tableau Presentation 12-15-16
mcoello
 
PDF
Presentation in ACL Connections in Atlanta - April 2013
mcoello
 
PDF
Connections09 Manuel Coello
mcoello
 
Analytics for Audit
mcoello
 
The Role of AI and Automation
mcoello
 
2019 gam-mc 2-15-19
mcoello
 
Implementing Technological Audit Practices
mcoello
 
Continuous Auditing
mcoello
 
Using Analytics to Audit T&E
mcoello
 
Tableau Presentation 12-15-16
mcoello
 
Presentation in ACL Connections in Atlanta - April 2013
mcoello
 
Connections09 Manuel Coello
mcoello
 

Acl Presentation 3 4 10 Final

  • 1. Analytics Unleashing the power of the audit process Manuel Coello Continuous Auditing and Monitoring
  • 2. Agenda 1. Project evolution 2. Establishing a Data Mart 3. An integrated approach 4. Use of CAATTs in Internal Audits 5. P2P – 20 power-packed analytics 6. Other Projects
  • 3. Background ► Founded in 1843 and based in New Britain, CT ► Manufactures Tools and provides Security Solutions ► 16,000 employees worldwide ► Grew revenue from $2.2B in 2003 to $4.5B in 2008 ► Soon to become $9.5B with the acquisition of Black and Decker
  • 4. Project History Audit Exchange - Team Extraction collaboration Process – Data CAATTs Mart 150 considered as Projections required 95 97 Management 75 Sponsorship 68 42 29 34 27 21 19 9 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Analytics Team
  • 5. Establishing a Data Mart
  • 6. Non-SAP -Entry - Vendor Payments - Goods Receipt Batch - Purchase Orders - Vendor Master Process ACL script Audit Server to import data Web Application Email Notification Audit of exceptions Manual Downloads/ Exchange Re Outside Systems Exceptions su lts posted in Re sharepoint to su - Payroll lts drive accountability Results ACL scripts - T&E - Credit Card for testing
  • 7. 7 day filter File name Example of an import script
  • 8. Leverage Tables Script Invoice Imports
  • 10. Integrated Approach -Analysis - Continuous Auditing - Continuous Monitoring
  • 11. How do we get there? Continuous Entity-wide involvement Auditing Business involvement Business Units Wave 3 Business involvement Mercury for Shared Services Access SAP tables directly Audit Exchange Testing cockpit Wave 2 Design advanced analytics Leverage BI/BW Centralized testing Execute recorded scripts ACL Directlink Testing of automated Processes controls Scheduler SAP training Wave 1 SharePoint Measuring Control effectiveness Collaboration with AutoAudit SOX and E&Y Infopack ACL desktop Edition Auditors following up on certain exception reports Technology Documenting Resolution Full time project manager Metrics Audit Team Transformation Map
  • 12. CONTINUOUS TESTING OF CONTROLS AND RISKS RESULTING IN: TIMELY NOTIFICATION OF GAPS AND WEAKNESSES IMMEDIATE FOLLOW UP AND REMEDIATION How Test for Benefits Errors - Cash recovery/ Based on exception rules Duplication cost avoidance Design scripts to Control - Drive business be run periodically breakdowns performance using an audit - Immediate software Policy violations remediation Extract Fraud detection - Support transactions and Anomalies Compliance perform analysis of the full universe Unusual - Fraud patterns deterrence
  • 13. Planning Design Implementation Execution Project Methodology Determine Scope Develop a Project Plan Design Sharepoint Site Document process under Evaluation of review Technology Tools Gather requirements from Develop scripts Analysis of IT key stakeholders Testing of scripts landscape Prepare list of scenarios Develop testing Preliminary discussion Define electronic data cockpit with key stakeholders Execution of test requirements Stakeholder script Review download Training Follow up on procedures with IT Status meetings exception report with stakeholders Document results Business Process in Sharepoint Procedures Update and report results
  • 14. Approach ► Look for volume, money, risk and opportunities ► Exceptions researched at the Controllership Level ► Partner with a SME in each area with an executive sponsoring the review ► Only exception testing for users – not reporting ► One year data; exceptions strategically selected
  • 15. Approach ► Why-why analysis focusing on root-causes ► Resolution of exceptions aggressively pursued- remediation oriented ► No formal audit reports issued
  • 16. Analysis Overview Outliers Abnormalities Trends
  • 17. Continuous Auditing/Monitoring Payroll T&E P2P 1. Payments beyond 1. Duplicate expense 1. Duplicate Payments termination date submissions 2. Old aged trade payables 2. Multiple changes in 2. Suspicious MCCs 3. Payment terms merit increases 3. Even amounts 4. Duplicate vendors in 3. Unusually high salary 4. High Mileage Master File increases 5. Unusual Items 5. Invoice prior to PO Date 4. Excessive overtime 6. Checks issued by AMEX 6. Split Purchase Orders 5. Multiple or unusual bonuses 7. Split transactions 7. Vendors in OFAC list 6. Duplicate employees 8. Spending trends 8. Non-preferred vendors (name/similar names) 9. Non-preferred vendor 9. PO price differences 7. Salary employees 10. High misc expenses 10. Purchases of even without email account numbers 8. Same bank account and diff clock numbers 9. Employees and vendors with the same address/bank account 10. Employees without the usual earnings or deductions
  • 18. CAATTs Computer Assisted Audit Tools and Techniques
  • 19. Audit Area Audit Test Audit Area Audit Test Source-to-Pay Payroll Payments Suspicious invoice sequence Payments Excessive merit increases and WIN awards Invoices falling below approval limits More than one payment per period Duplicate Payments - same vendor and invoice number Payments to same bank account with different names Duplicate Payments - same invoice and amount paid to two different vendor numbers Unusual bonuses Duplicate Payments - same vendor, amount and invoice date Employees without the usual deductions Frequency analysis based on first two digits of payment amount Pattern of continual overtime Payments for even multiples Payments beyond termination date Payments to employees Master File Duplicate/similar employee names Payment runs on weekends Employees with incomplete fields Audit sampling tool Purchasing Purchases of unneded material (E&O inventory) Other Purchase price unreasonably high (using price history) Aged open Purchase Orders Proper segregation of duties in risky financial areas (based Payables Outstanding old debit memos System Access on GRC "rulebook") Old open invoices Terminated employees with system access Vendor Master Match employee and vendor bank accounts Match employee and vendor addresses Fixed Assets Useful lives per SWK policy Search of unusually incomplete fields in the Master File Recalculate depreciation Payment terms not in compliance with DOA Completeness in Fixed Asset Subledger "fields" Capitalization below threshold limits Quote-to-Cash Inventory Recalculate E&O analysis Sales Sales price lower than price lists (price overrides) Recalculate usage data used for E&O Credit analysis and trends Excessive inventory write offs (unusual trends) AR Subledger Collectability analysis Manual Journal Entries (rounded amounts, unusually large Recalculate aging General Ledger entries) G/L and subledger reconciliation Rounded adjustments Customer net credit balances Reversals Excessive write-offs (unusual trends) Posting to "miscellaneous" accounts Customer Master Customers exceeding credit limits Match "key" words (e.g. government, General, etc.) to Payment terms not in compliance with DOA FCPA payment and expense data Countries or customers from government banned lists
  • 20. CAATT Repository Aged for team allows open payables collaboration ACL Project
  • 22. Analytic: Duplicate Payments - Same vendor and invoice number VENDOR_NAME VENDOR AMOUNT_IN_DC DOC__DATE TYPE REFERENCE NORTHEAST UTILITIES 1000244 (1,052) 03/26/2008 XR 00207-0308 Same invoice processed twice. Error by typing NORTHEAST UTILITIES 1000244 (1,052) 03/26/2007 KR 00207-0308 Same invoice processed twice. Error by typing shipping to diff address,two LANCET GLASS LTD 1001707 (1,283) 02/15/2007 XR 50394 invoice shipping to diff address,two LANCET GLASS LTD 1001707 (186) 06/29/2007 KR 50394 invoice AUSTIN HARDWARE & SUPPLY INC 1004581 109 08/03/2007 Typo error in KG 650246 diff credit date and salesman,two invoice date diff credit date and AUSTIN HARDWARE & SUPPLY INC 1004581 (157) 07/12/2007 RE 650246 salesman,two invoice bill payment, one for Aug. one NATIONAL GRID 1014380 (844) 08/30/2007 RE 93009-0907 for Sep. bill payment, one for Aug. one NATIONAL GRID 1014380 (816) 10/02/2007 RE 93009-0907 for Sep. Triple paid. Same bill entered KONICA MINOLTA BUSINESS SOLUTIONS 1029660 (1,516) 08/15/2007 KR 4590557 with different dates Triple paid. Same bill entered KONICA MINOLTA BUSINESS SOLUTIONS 1029660 (1,516) 07/16/2007 KR 4590557 with different dates
  • 23. Analytic: Duplicate Payments - Same vendor, date and amount TYPE VENDOR VENDOR_NAM REFERENCE AMOUNT_IN_ DOC__DATE BUSA XR 1030888 SIFY LIMITED EXPIMS069 (11,892) 7/31/2008 0700 XR 1030888 SIFY LIMITED 0212254-IN (11,892) 7/31/2008 0700 XR 1035840 K & L Kaine Enterprise 508 (7,424) 7/4/2008 0700 XR 1035840 K & L Kaine Enterprise 608 (7,424) 7/4/2008 0700 KR 1011570 DIV OF WORKERS COMPENSATI INV011508 (4,138) 1/15/2008 0700 XR 1011570 DIV OF WORKERS COMPENSATI 48860-0108 (4,138) 1/15/2008 0700 RE 1015894 ALLIED WASTE 2001786263 (3,580) 9/30/2007 0719 XR 1015894 ALLIED WASTE 0742-001786263 (3,580) 9/30/2007 0719 XR 1011534 KFORCE INC 3247099 (2,349) 10/5/2007 0700 XR 1011534 KFORCE INC 3247099A (2,349) 10/5/2007 0700 Typo or clerical errors
  • 24. Analytic: Suspicious Vendors using the unbroken invoice sequence VENDNO Vendor Name Invoice in Sequence Invoices Total % Invoices AMOUNT 4742 Wielaard Stellingsystemen 276 324 85% 207,876 7000010 Scan Modul MEDI-MATH B.V. 11 13 85% 107,802 2196 Scan Modul System 1237 1490 83% 5,602,788 2195 ByrumLabflex SA 352 450 78% 14,524,336 60000546 Garmt Design 3 4 75% 31,190 7000011 Scan Modul MEDI-MATH B.V.B.A. 18 26 69% 282,657 4894 VDL Home Tech 10 18 56% 19,124 4714 ADP Nederland B.V. 12 33 36% 6,437 2524 Sueters Interieurbouw 30 96 Our company 169,890 31% 60000076 Athlon Car Lease 20 73 27% 190,309 4693 Etiflex Holland 3 13 is their23% main 8,613 5783100 Projectinrichting van Leeuwen 9 46 customer20% 79,303 3609 Hendriks Techniek Flevo BV 3 16 19% 26,829 4765 Broere Vliegpassages B.V. 3 16 19% 11,785 4761 Sellox B.V. 1 7 14% 5,588 5008 Transverba-Waalex B.V. 2 14 14% 7,726 5026 Café Bar Holland b.v. 1 7 14% 3,288
  • 25. Analytic: Invoices falling below approval limits Below threshold $2,500 Above threshold $2,500 COCO VENDOR_NUM_C # invoices Amount # invoices Amount 616 52 3,211 1,325,339 311 2,114,353 615 2196 1,169 860,752 405 4,922,257 615 4742 305 122,925 18 84,119 616 2 157 60,238 20 121,198 615 2 113 55,924 2 82,774 615 2195 103 120,273 374 14,472,678 616 4 101 32,933 2 7,728 615 2524 95 78,762 26 95,610 615 60000250 87 53,428 - - 616 60000076 57 11,728 14 173,162 615 4450 56 26,053 15 236,435 615 4165 52 31,145 2 6,395 616 4841 48 11,021 - - 616 Transaction that 60000019 45 77,772 1 3,694 615 may fall under 2160 44 26,207 2 5,108 615 the4924 radar 44 31,137 6 19,812 615 3 43 14,500 1 2,915
  • 26. Analytic: Payment runs on weekends C_COCO DAY BUY_FROM_VENDOR_NO_ POSTING_DATE NO_ AMOUNT 616 Sun 4 1/25/2009 40N08798 1,421 616 Sun 60000076 1/25/2009 40N08799 12,528 616 Sun 60000076 1/25/2009 40N08800 136 616 Sun 60000076 1/25/2009 40N08801 157 616 Sat 2 1/31/2009 40N08831 10,918 616 Sat 4169 1/31/2009 40N08832 107 616 Sat 4841 1/31/2009 40N08833 213 616 Sat Check runs 1/31/2009 4714 on 40N08837 104 616 Sat 60000076 Saturday or1/31/2009 40N08838 32 616 Sat 4169 Sunday 1/31/2009 40N08839 110 616 Sat 4169 1/31/2009 40N08840 51 616 Sat 2 1/31/2009 40N08841 115 616 Sat 2 1/31/2009 40N08842 80 616 Sat 4914 1/31/2009 40N08843 100 616 Sat 4914 1/31/2009 40N08844 65 616 Sat 4914 1/31/2009 40N08845 72 616 Sat 4911 1/31/2009 40N08846 4,361
  • 27. Analytic: Purchase of unneeded material Purchases C_SKU INVENTORY QUANTITY_ON_HAND AMOUNT # POs RESERVE PO QUANTITYcontained in Amount the reserve 40852100D 2,372 3 2,372 21,193 8 32 3 2,372 4130127/0 7,663 9 1,916 11,943 5 14 9 7,663 55705 1,373 40 1,373 9,747 2 38 38 1,304 40912100 3,746 4 937 4,683 2 5 4 3,746 2434540 3,638 79 3,638 3,454 2 75 75 3,454 201087 3,162 62 2,530 3,060 1 Purchases of 60 60 3,060 40913200 2,376 2 594 2,376 1 E&O Material 2 2 2,376 C10-RVS 2,629 2 1,315 1,315 1 1 1 1,315 1064720 772 10 386 768 2 10 10 772 4182054 71 2 71 500 4 14 2 71 2064310 126 4 126 315 1 10 4 126
  • 28. Analytic: Price increases unusually high NO_ UNIT_COST UNIT_COST1 INCREASE % AMOUNT COUNT1 1104521065011131 1,545 2,643 71 1,538,487 32 1004521063011100 1,208 1,672 38 1,381,912 16 1104521065011141 1,545 2,643 71 1,285,581 24 1106521045011131 1,578 2,724 73 1,054,751 21 1106521045011141 1,578 2,328 48 999,083 20 1006521043011100 1,133 1,133 0 770,569 16 2364251 4 12 165 530,446 61 1004509063011100 1,004 1,324 32 405,090 8 1106521054011122 2,963 2,963 0 325,958 6 0002010020000400 249 382 53 315,566 9 2364253 3 4 25 305,292 60 Inflated prices
  • 29. Analytic: Benford Law Above upper bound
  • 30. Analytic: Employee and vendor have the same bank account SupplierCode SupplierName IBAN incoterms last_change SupplierAddress C01458 A *nc 20080213 VIA RIVA C00379 B *nc 20080415 VIALE FIUME N.5 6461 C *nc 20080627 VIA ERMINIA MAGGI 23 EMPLOYEE_NUMBERNAME IBAN TOWN ADDRESS 30077 A RANCO VIA CASTELLO INFERIORE 5 12942 B BRENTA VIA CEREDA 2 MFG C CIACCI VIA PILONE 129 Same bank accounts
  • 31. Analytic: Purchases of even numbers VENDOR_NUMBER AMOUNT_EUROCURRENCY Invoice__ DATE_MOVEMENT NUMBER_MOVIMENT 1491 (156,000) EURO 20081222 20081222 2721867 662 (108,000) EURO 20081126 20081128 2707853 5531 (72,000) EURO 20080923 20081014 2685244 6183 (50,400) EURO 20080702 20080828 2661559 1349 (43,200) EURO 20080929 20081020 2687195 6488 (42,000) EURO 20080625 20080909 2666249 4188 (40,200) EURO 20081126 20081126 2706205 5558 (36,000) EURO 20081127 20081210 2717316 2382 (36,000) EURO Multiples of 100 20081222 20081218 2721610 4398 (34,800) EURO 20080115 20080129 2552247 5739 (33,600) EURO 20080930 20081031 2693394 6470 (33,000) EURO 20081223 20081229 2723274 1503 (30,000) EURO 20080310 20080410 2597341 1503 (30,000) EURO 20080701 20080702 2638885 5547 (25,200) EURO 20081211 20081215 2718998 3664 (24,000) EURO 20080131 20080222 2566762 3664 (24,000) EURO 20080331 20080402 2587714
  • 32. Analytic: Open aged trade payables Aging Amount Count Less than 6 months 2,014,930 744 6 mo-1 yr 622,949 290 1yr - 2yr 296,229 92 2yr - 3yr 100,000 45 Aged open 3 yr - 4 yr 75,000 48 Aged AP Multiples of 100 payables 4 yr - 5 yr 50,000 25 Greater than 5 yrs 25,000 20 Totals 3,184,108 1,264
  • 33. Analytic: Analysis of non-electronic payments (checks) Payments Percent Percent # Vendors # Payments Amount per Year of Count of Field 0-4 10,907 70.39% 18.01% 17,212 74,505,538 5-9 1,921 12.40% 13.35% 12,753 59,573,419 10-24 1,920 12.39% 29.30% 28,001 122,172,795 25-49 517 3.34% 18.07% 17,271 119,465,712 50 - 99 172 1.11% 11.87% 11,346 42,806,722 100 - 200 50 0.32% 6.92% 6,613 45,117,170 >200 9 0.06% 2.47% 2,359 36,015,004 Totals 15,496 100% 100% 95,555 499,656,360 Aged open Opportunities to move to ACH payables
  • 34. Analytic: P-Card Analysis Percent Percent Transaction_Amount Count Transaction of Count of Field _Amount <1,000 48 13% 0% 21,047 1,000 - 4,999 93 26% 4% 259,015 5,000 - 9,999 78 22% 8% 564,232 10,000 - 24,999 70 20% 16% 1,116,768 Aged open 25,000 - 99,999 Abnormal 57 16% 36% 2,484,553 100,000 - 249,999 trend 9 3% 24% 1,619,194 250,000 - 500,000 payables 2 1% 11% 750,510 Totals 357 100% 100% 6,815,318 11 employees Aged open drive 35% of payables the purchases
  • 35. Analytic: Duplicate Vendors in Master File Vendor Num Status TEST1 TEST2 TEST3 TEST4 0000700184 NOT DUPLICATE 0000700185 0000700186 DUPLICATE DUPLICATE ADDRESS ADDRESS Duplicates: 0000700187 NOT DUPLICATE 1. Same name 0000700189 0000700192 NOT DUPLICATE DUPLICATE NAME TaxID2 Aged open 2. Same 0000700196 DUPLICATE NAME 0000700198 0000700199 DUPLICATE NOT DUPLICATE NAME ADDRESS payables address 0000700200 NOT DUPLICATE 0000700202 0000700204 DUPLICATE NOT DUPLICATE TaxID2 3. Same Tax ID 0000700205 NOT DUPLICATE 0000700206 NOT DUPLICATE 0000700208 DUPLICATE NAME ADDRESS 0000700209 NOT DUPLICATE 0000700210 DUPLICATE NAME 0000700212 DUPLICATE NAME 0000700214 DUPLICATE TaxID2 0000700215 DUPLICATE NAME 0000700216 NOT DUPLICATE 0000700217 DUPLICATE NAME ADDRESS 0000700218 DUPLICATE NAME ADDRESS TaxID2 0000700219 0000700221 DUPLICATE DUPLICATE NAME NAME ADDRESS 11 employees 0000700222 0000700223 NOT DUPLICATE DUPLICATE NAME ADDRESS TaxID2 drive 35% of 0000700224 0000700225 NOT DUPLICATE NOT DUPLICATE the purchases 0000700226 NOT DUPLICATE
  • 36. Analytic: Use of non-preferred vendors Temp Labor Total Companym 1010 Companym 1020 Companym 1040 Vendor # Amount # Invoices Amount # Invoices Amount # Invoices Amount 0001013617 790,900 14 - - - - - 0001009169 461,444 193 424,998 154 - - - 0001022503 251,848 10 - - - - - 0001011534 164,626 122 15,180 12 - - - 0001028885 105,112 13 - - - - - 0001002872 79,077 29 - - 79,077 29 - 0001011527 68,452 24 31,927 14 - - - 0001031176 64,898 22 - - - - - Business, 0001001894 0001035941 52,669 47,472 18 2 Aged open 2,916 - volume and - 3 - - - - - - 0001034829 41,360 72 41,360 72 - - - 0001034907 0001033046 41,083 38,720 4 25 payables 41,083 frequency - - 4 - 38,720 - 25 - - 0001028798 33,191 14 - - - - - 0001006691 29,486 32 29,486 32 - - - 0001020424 27,997 39 - - 27,997 39 - 0001031818 27,992 16 27,992 16 - - - 0001018005 22,220 1 - - - - - 0001030548 20,463 8 20,463 8 - - - 0001012835 18,018 19 - - - - - 0001008166 17,248 16 - - 17,248 16 -
  • 37. Analytic: Analysis of Vendor Terms Payment C_Category Amount # Vendors _terms Z006 Non-inventory 90,684,183 2,748 Z035 Non-inventory 52,874,490 2,707 ZD04 Non-inventory 49,866,751 4 ZC99 Non-inventory 24,521,644 201 Aged open Payment terms Z013 Z005 Non-inventory Non-inventory 23,661,948 20,080,190 584 744 by category payables ZC99 Inventory 12,872,017 56 Z007 Non-inventory 12,350,877 186 Z005 Inventory 12,140,090 339 Z013 Inventory 9,099,744 124 Z006 Inventory 8,122,559 631 ZD06 Inventory 6,535,509 1 1 Non-inventory 6,224,268 228 ZD05 Non-inventory 5,123,545 2 ZD04 Inventory 3,317,955 1 1 Unidentified 2,895,549 49 ZD25 Unidentified 2,636,546 1 Z035 Inventory 2,606,600 41 Z002 Unidentified 2,554,497 145 ZD06 Non-inventory 1,668,997 3
  • 38. Analytic: Vendors with PO Box as only address Percent Percent Stratification Count Amount of Count of Field 0.00 - 9,999 100 69.24% 1.91% 500,000 10,000 - 24,999 200 9.81% 2.47% 5,000,000 25,000 - 99,999 300 11.96% 9.84% 20,000,000 100,000 - 249,999 200 4.66% 11.17% 25,000,000 250,000 - 499,999 50 1.88% 9.78% 15,000,000 500,000 - 1,000,000 250 1.55% 16.43% 30,000,000 >1,000,000 10 0.90% 48.40% 100,000,000 Totals 1,110 100% 100% 195,500,000 Aged open Risk with mid- volume vendors payables
  • 39. Analytic: Retro Purchase Orders Invoice open Aged date prior to PO date payables COMPANY_CODE ENTERED_BY INVOICE_DATE PO_DATE PO_NUM ITEM_DESC VENDOR_NAME ITEM_NUM 98 SMM0505 3/31/2009 11/20/2009 573041 Not inventory item FASTENAL COMPANY 8431030000 93 KML1025 10/28/2009 10/30/2009 572552 Not inventory item MAIN STREET BANK 8431019200 93 KML1025 10/28/2009 10/30/2009 572552 Not inventory item MAIN STREET BANK 8431019200 98 GDG0831 7/14/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE0685 98 GDG0831 6/30/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE0685 98 GDG0831 7/20/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE0685 98 GDG0831 7/14/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE0685 98 GDG0831 6/30/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE0685 98 GDG0831 7/20/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE0685 93 FJT0722 9/25/2009 9/28/2009 571701 ROD,CONSTRUCTION STAPLE,6.3MM GERDAU AMERISTEEL 167096 93 FJT0722 9/25/2009 9/28/2009 571701 ROD,CONSTRUCTION STAPLE,6.3MM GERDAU AMERISTEEL 167096 91 HJM1203 9/24/2009 9/25/2009 571666 Not inventory item TEKNICOTE, INC. 8431030000 91 FJT0722 9/14/2009 9/15/2009 571344 ROD,CONSTRUCTION STAPLE,6.3MM GERDAU AMERISTEEL 167096 98 SMM0505 3/18/2009 9/10/2009 571204 Not inventory item MSC INDUSTRIAL SUPPLY CO INC 8431030000 98 SMM0505 5/6/2008 9/10/2009 571205 Not inventory item MSC INDUSTRIAL SUPPLY CO INC 8431030000 98 GDG0831 4/9/2009 8/24/2009 570598 Not inventory item AEROTEK INC 8431019100 98 GDG0831 4/9/2009 8/24/2009 570598 Not inventory item AEROTEK INC 8431019100 98 GDG0831 4/4/2009 8/24/2009 570598 Not inventory item AEROTEK INC 8431019100 98 GDG0831 5/7/2009 8/24/2009 570598 Not inventory item AEROTEK INC 8431019100 98 GDG0831 5/21/2009 8/24/2009 570598 Not inventory item AEROTEK INC 8431019100
  • 40. Analytic: Payment date prior to invoice date Invoice date Aged open prior to payables payment INVOICE_NUM PAYMENT_DATEINVOICE_DATE CHECK_NUM PAY_AMT PA_JE_ CURRENCY ED80740237 20081204 20081209 68653 621.14 PA0006400 CAN ED80740345 20081204 20081209 68653 586.14 PA0006401 CAN ED80740465 20081204 20081209 68653 86.24 PA0006402 CAN ED87039683 20081204 20081209 68653 68.19 PA0006403 CAN
  • 41. Analytic: Payment prior to due date Invoice date Aged open prior to payables payment VENDOR_NAME INVOICE_DATE DUE_DATE PAYMENT_DATE C_DIFFDAYS1 PAY_AMT JISCO CORPORATION 20080909 20081208 20081124 14 48,375 JISCO CORPORATION 20080908 20081207 20081124 13 39,200 JISCO CORPORATION 20081001 20081230 20081222 8 27,291 BESCO MACH INDUST (ZHEJIANG)CO 20081106 20090105 20081229 7 14,489 KLEAR KUT ENGRAVING 20080930 20081114 20081107 7 3,604 HOLLINRAKE COMMUNICATIONS 20080930 20081114 20081107 7 545 DB ADVANTAGE INC 20080930 20081114 20081107 7 320 MACHINERIE PLUS LTEE 20081209 20081210 20081204 6 621 MACHINERIE PLUS LTEE 20081209 20081210 20081204 6 586 MACHINERIE PLUS LTEE 20081209 20081210 20081204 6 86 MACHINERIE PLUS LTEE 20081209 20081210 20081204 6 68 MERISCA MARKETING 20081121 20090105 20081231 5 2,369 JISCO CORPORATION 20080928 20081227 20081222 5 54,582 BRODIE INC 20081006 20090104 20081231 4 595 MSC INDUSTRIAL SUPPLY CO INC 20081006 20090104 20081231 4 532 MSC INDUSTRIAL SUPPLY CO INC 20081006 20090104 20081231 4 279 NICOLSON CUTTER GRIND & SUPPLY 20081120 20090104 20081231 4 274
  • 42. Other Projects ► Trade Compliance ► Data Conversions ► Review of employee access to restricted areas ► Review of domains (network access) ► Sales Taxes
  • 43. PRIOR STATE CURRENT/FUTURE STATE Retrospective Near Real Time Review Review Narrow scope Entity wide Sample Approach Full Universe
  • 44. PRIOR STATE CURRENT/FUTURE STATE Surprises with control Rapid response to breakdowns control breakdowns Fraud identified by Fraud identified/deterred Complaints / accidently by data indicators Audit tests done Usage of CAATTs manually
  • 45. Conclusions ► CAATTs uncover issues that could be missed by auditors ► CM&A program proactively protects the company from errors, abuse, waste, revenue leakage, fraud ► The magic is in the data but the value is in remediation ► Audit becomes an agent of change