At the end of the year, I tend to reflect back on what I have done or not done. It occurred to me that 2023 will be my 35th year using ACL Analytics (Galvanize, Diligent) on a daily basis. Throughout the years I have had many failures and successes. I have learned from identifying lessons-learned when things worked and even more importantly when they did not. I also took responsibility…
My understanding is that SAP user roles are difficult to design properly, and the review of user authorizations and access rights is equally challenging. I thought that I could use analytics to identify instances where a user had performed transactions that constituted a potential separation of duties (SOD) issues in the FI component and support management in their reviews to identify roles that were not designed properly. The analysis utilized…
I was fortunate it my early career by a forward-thinking manager. Back in 1990, my manager allowed me to explore the notion of data analytics to support audit. The manager also had the view that the analytics developed for the audit (e.g., AP analytics) should be handed over to management for their use (e.g., AP manager does continuous monitoring). So, I began my analytics career with the notion that analytics…
After years and years of mistakes, missteps, or invalid analysis, I have developed a series of steps that can reduce the likelihood or errors and increase the success of analytics for audit purpose. The first step is to ensure that you understand the goals and objectives of the audit. Then the following steps should be performed: Based upon the audit objectives and risks, and mitigating controls identify analytics that will…
Part #1 looked at why assessing data integrity is an important, value-added activity that supports management decision making. Part #2 examines things you can do to improve the integrity of the data and your analytic results. While I will be looking at data integrity primarily from a data analytics perspective, it is important to recognize that many people play a role in the integrity of data. Ensuring data integrity is…
A common refrain that I hear is, “We can’t rely on the data because it does not have integrity.” This raises a couple of questions in my mind and should in yours as well. First, what is management using to produce its reports and make decisions? Second, how accurate does your data have to be to allow you to perform analytics and arrive at valid recommendations/conclusions. The obvious answer to…
Cost recovery firms make millions of dollars identifying and recovering duplicate payments. They often have well developed analytics that can identify duplicate payments while reducing the number of false positives. You will pay 25-50% but you are getting money back, so it feels like a win-win. However, there are two things to keep in mind: 1) they go after the low hanging fruit and the largest possible duplicates; and 2)…
Here are my top eight best practices for creating better internal audit reports that hit the mark: Audit Objective: ensure that the audit objective addresses the risks to the goals and objectives of the organization. It should drive the risk identification and assessment; and be a foundation for the audit workplan and the conduct of the audit. And ultimately, is it the statement upon which the audit concludes. Audit Workplan:…
This is the seventh in a series of articles on data analytics and internal audit. This article looks at the audit finding statement: recommendation. The focus will be on the use of data analytics to assist you in determining the recommendation. In simple terms, the recommendation is the action that management should take – putting in a control, changing a business process, etc. If the other components of the finding…
This is the sixth in a series of articles on data analytics and internal audit. This article looks at the audit finding statement: Impact. The focus will be on the use of data analytics to assist you in determining the impact of what was observed (the condition) and to support the recommendation. In simple terms, the impact answers the ‘why should I care.’ What is the impact of controls failing…