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…
This is the next post in a series that discusses the importance of having a proper audit objective, defining the business goals and objectives, and the risks to the achievement of those objectives. This article will discuss the identification and assessment of risk. The next series of articles will look at the audit finding statement: Criteria, Condition, Cause, Impact and Recommendation. The focus will be on the use of data…
According to the Protiviti report, ‘SOX Compliance and the Promise of Technology and Automation1’ SOX compliance costs have shown year-over-year increases but are starting to level off. It also states that organizations are beginning to make greater use of technology and automation to support the compliance process. However, implementing automation in the SOX compliance process is difficult for many organizations. Understanding and defining requirements, getting stakeholder buy-in, and the investment…
It feels odd to have to continue to justify the need for and use of analytics. What can I add that has not already been stated many times over the past 20-30 years? Studies since the early 1990’s have pointed to the need for businesses and auditors to embrace the use of analytics. More recently, Deloitte’s 2021 Global Risk Management Study1 recognizes the potential for digital risk management technology to…
COVID hasn’t really changed things for auditors – it has just brought things to the forefront that we should already have been doing. Things like: focusing on key risks to the organization, and embracing and maximizing the use of analytics. This article describes how an audit function can check on the robustness of the internal controls, identify and assess risks, prevent fraud, and provide assurance – remotely – by employing…
For years I have been thinking about Risk, Controls, Black Swans and Entropy; and more recently about Analytics and RPA. Only recently did I understand how these are all connected and impact large and small organizations – particularly in activities that are high-risk and strictly controlled. Sadly, these tightly controlled areas are often overlooked until it is too late. Which bring us to Risk and Controls. Risk and Controls: Business…
GRC: Governance, Risk and Compliance (or, in my view, Controls) is critical to companies that want to remain viable. A company’s GRC activities should be not just coordinated, but also integrated to provide all levels of management with a view into changing risks and risk levels. If you do not have structures and procedures in place to monitor, identify and assess these risks you are less likely to succeed. Want…
I haven’t looked at payroll very often; at least not as often as I think I should or would have liked. Payroll can be a significant cost to an organization – easily representing 50% of a company’s total expenditures in some industries – but senior management seems to think that the controls over payroll are good and therefore it is low risk. This belief is often transferred to audit even…
By 2011, I was becoming more and more involved in data analysis to detect fraud. I had been doing this for years but had never really thought about the approaches I was taking to assess fraud risk and determine the analytics to perform. The following is the result of my deliberations (which continue to this day). Fraud Detection The unrelenting advancement of technology is affecting virtually every aspect of our…