I often write about analytics and other aspects of data extraction, interpretation and the like. Today I thought I would do something different. I am teaching a 4th year university/college course. The students are eager to get their CMA/CPA designation and go off to work for a big accounting firm. I admire their zeal, but worry about the lack of practical “seat of the pants” knowledge. I tell them that…
Studies after study have shown that data analytics is more effective and efficient at detecting risk, and identifying control weaknesses, non-compliance, and inefficient business processes. Chief Audit Executives (CAEs) have repeated stated that data analysis expertise is a much needed skill in internal audit, and IIA surveys of software over the past 10-15 years have rated data extraction, data analysis and analytical software as critical tools for effective audit organizations. …
The following posts is part 2 of “Adding Value to Compliance Audits” Given a good understanding of the current level and sources of risk, the next step is to look at the requirement for, and the adequacy and effectiveness of, the control to mitigate the risk. This requires an understanding of the cause and source of the risk and the operation of the control. Is the control still required? Does…
I have often been critical of compliance audits, but I recently realized that it is not the ‘compliance audit’ that bothers me, but the way it is done. This led me to write the following thoughts. It is difficult to argue that compliance audits are not an important internal audit product. Done properly, they can protect a company from fines, penalties and even criminal charges. For example, non- compliance with…
Following on the success achieved by the development of the standard extract of financial data from SAP, I decided to design and develop a standard extract from PeopleSoft – our company used SAP for finances and PeopleSoft for HR and another package for Pay (don’t ask why). For HR data, we really only needed three files to address most of the audit requirements: Person – providing information on the employee…
Imagine my excitement when I had 7 responses to my previous post on Payroll and then my utter disappointment when I found out that all we in Russian and had nothing to do with the content of my blog. This continued for several days and suddenly switched to English posts about Credit Unions. In total I had over 65 spam bot posts including two that wanted to help me monetarize…
Accessing different systems, trying to address auditor requirements, and performing complex analysis – they all present risks. And while I have had a great deal of success, there also have been many mistakes. I once heard it said, “learn from others mistakes – you don’t have enough time to make them all yourself” or something similar. This is why I always try to post a lesson-learned and this post is…
It was hard to believe, but I had now been at this (data analytics to support audit) for 20 years. And I still found it interesting, challenging, frustrating, rewarding and aggravating – all at once. I was constantly being asked to access new systems and perform analysis for different types of audits. At the same time, I had my regular monthly routine tasks of extracting, downloading and cleansing data we…
People, even those that perform analytics, often think that data analysis can only be applied to financial-type audits. I have tried to highlight other types of audits where analytics played a significant role including transportation, inventory, and hazardous materials (environmental). In that vein, I offer you analysis that was part of an HR recruitment audit. he organization was an international/national police force. Like many police forces, it needed a fairly…
Disaster! After 10 years of hard work to develop a decent understanding of the company’s finance, inventory, two HR and three pay systems, we switched to SAP (for finance and payroll) and PeopleSoft for HR) and another ERP system for inventory. It was bad enough that we were changing systems, but to implement separate systems for the major functions seemed idiotic and created much more work for me and the…