Randy Cowell - Regional Director Current Trends in Audit Management Technology – “Changing Times for Audit” Randy Cowell - Regional Director

Introductions Randy Cowell Regional Director, CCH TeamMate 20 Years of Internal Audit, Methodology and Audit Management Software Experience Assisted over 200 organizations in the selection and implementation of audit management software Led the IIA in their implementation of TeamMate for Quality Assessment program

Increasing Pressures In this tough economic climate, internal audit shops around the world are under pressure to be as efficient as possible. How to do more with less is a question on everyone’s mind. Do we agree with this? Has any been faced with staff cuts? How about budget cuts? Taking on different job responsibilities as a department? Like Risk or Governance, Risk, & Compliance SOX work

Our Objective Answer the question: How to do more with less?

Audit Memory Lane Does any one remember when we used “Green bar” paper to document our work. How about when there was no email. When there were no computers. No Word or Excel. When there were no audit tools.

Have the technology advances changed what we do as auditors? What do you think? It hasn’t changed “what we do” but “how we do it.” We haven’t changed that we review risk and propose things to mitigate that risk. We have just changed how we go about analyzing it.

How have things changed? Slide presentations Documents & Spreadsheets Automated tools Telecommuting Network/Servers Email Distributed Workforce Web meetings 20-25 years ago, we were not dealing with this stuff. Things were very manual and it has taken time for audit shops to change with the ever increasing technology changes. How does your audit shop adjust to this ever changing environment. Data files Videos

What type of tools do you need? Data Extraction Data Analysis Risk Assessment/ Compliance Fraud Detection Audit Management

Data Extraction tools Data Extract tools provide the ability to obtain and find meaning in data by cutting and dicing or drilling down to the required level of detail. Benefits include: Improved productivity and efficiency. Ability to spot fraud, expenses abuse, and a failure to record staff taking annual leave, for example. Data Spreadsheet Extract

Data Extraction Software ACL SAP IDEA SQL Excel

Data Analysis tools Data analysis tools take data that has been extracted and helps auditors find meaning in a mass of data or spot trends. Benefits include: increase the efficiency of audits. Instead of working with a limited sample of data — such as a cross section of invoices — these tools can analyze all of it, giving better audit coverage. Data Spreadsheet Analyze

Data Analysis Software ACL Excel Access IDEA

Fraud Detection/Investigation tools Fraud Detection/Investigation tools helps audit shops spot anomalies, fraud indicators, and other red flags that they wouldn’t have seen otherwise. ACL Excel IDEA Crystal Reports SAS

Risk Assessment tools Risk assessment tools helps audit departments assess risks for their annual audit plan Benefits include: Helps auditors track risks consistently and provide a standard format for all risk assessments and risk calculations. Facilitate comparison of risks across the organization. Saves time when performing new risk assessments. Prepare the annual audit plan more quickly. Easily update risk criteria as an audit assignment progresses. Can determine at a glance which areas of the business are “high risk.”

Risk Assessment software Excel TeamRisk Internally developed I do not see how you can obtain the benefits with using Excel, but I can with TeamRisk.

Other Tools Lesser used tools are used by audit departments, such as: Compliance tools - allow organizations to benchmark departments, contractors, services, etc. against defined standards. Control self-assessment tools. GRC tools Sox tools Continuous auditing tools

Automated Workpaper tools Automated workpaper tools helps audit departments : Standardize their audit work, be more productive, and provide consistent results & reporting styles. They also facilitate review and sharing of audit files with peers, which leads to better quality work overall. Provide centralized storage of workpapers making it easier for auditors to access information and improves the organization of the audit shop as a whole. Also helps ensure workpapers comply with The IIA’s International Standards for the Professional Practice of Internal Auditing (Standards). Facilitate audit tracking and repeat or follow-up assignments, which helps cut audit planning time and staff workload.

Automated Workpaper tools Various benefits include: Automated tools allow for easy tracking of audit issues and the related responses. Able to compile and issue draft/final reports much sooner after finishing audit fieldwork. Colleagues working on the same assignment can review workpapers from remote locations. Eliminates all hard copies of workpapers, which saves office space and reduces waste.

Automated Workpaper Software TeamMate AutoAudit Word Excel

The Bottom Line “Rewards” of Automating… Increased productivity Planning Documentation Review Automatic Report Generation Data mine (committee reporting and trend analysis) Increased efficiency No More “Lost” Manual Workpapers No More “Lost” Data Scattered in Multiple Computer Files Manager’s Expectations are Clearly Defined

What’s driving the need for audit tools? Elevated profile of the audit dept - important part of governance infrastructure. More engaged Audit Committees - looking for more information & quicker. Management requires different levels of information. Need to be “risk”-focused. Constraints on budget and/or resources. More requirements on managing & reporting on costs. More emphasis on open issue tracking & recommendation follow-up.

Obstacles and Challenges You are implementing more than just technology – you are implementing your methodology. Therefore, you need to think about more than just technology. Think about what your needs should be, rather than what they currently are. Use the implementation of your tool as a change agent. Technology Methodology Knowledge Behaviour Remember, as audit departments – our work is generally telling people that they need to “change” because of something that is being done is exposing the company to increased risk. And because of that we want you to make this “change” to mitigate the risk. And what do we get – they don’t want to change. However, when considering an automated audit tool they say the same thing – we don’t want to “change.”

Things to expect from a system Knowledge Management or content should be available. Should mirror “the way you work” – your business process. Needs to be a complete solution. Functionality should be integrated. Should be easy to use.

Further Considerations Flexibility / configurability vs. “customization” What is the level of vendor commitment and support Is the software a complete solution What type of connectivity issues do you have & what are the infrastructure requirements Can the software easily adapt to your business Enabler, not replacement of talent Is there Management Support? Do you have budget approval? Is there Audit Committee Support? Remember – are you willing to “adjust/change”

What are your needs: Work Papers Risk Assessment/Audit Planning Project tracking & budgets Timekeeping Automatic Reports Open issue tracking & follow-up Monthly management reports Trend analysis

Steps to Automating Identify current department information Audit workpapers Program & spreadsheets What are you monthly management reports Determine automation objective/needs Is your current technology feasible What is management expectations Do you need to migrate historical data Establish implementation timeframes

Steps to Automating 4. Evaluate Software Needs Do you have any compatibility issues with current software What is needed (as mentioned earlier) 5. Establish Automation Budget Budget for software Budget for hardware Get budget approval

TeamMate Product Overview A COSO-compatible risk assessment tool for generating risk based audit plans A state of the art tool for scheduling your staff and audits A web based issues tracking and reporting system Effectively manage budget vs. actual time & expenses TeamStore A Comprehensive Electronic Work Paper system

TeamMate TeamStore The TeamStore is an electronic repository that contains audit programs, workpaper templates, risk and controls as well as example exception write-ups. The TeamMate TeamStore includes: Over 10,000 searchable audit steps from AuditNet (including premium content) The complete COBIT audit approach (over 300 IT audit steps) The IIA Quality Assessment framework

TeamMate – The Industry Standard Vendor Viability is Critical In the past few years numerous Audit Management products have been discontinued and many vendors have ceased support or ceased development of upgrades. Some products are being re-invented as SaaS solutions and forcing the licensee to abandon their current version and re-license the “new” version all over again. Many products are GRC add-ons designed to pull clients in to a large and expensive GRC license.

TeamMate History 5,000 Number of end users TeamMate 1.0 TeamMate 97 GE Capital Finance Washington SAO 10th User Forum Microsoft Texas SAO South African AG NAIC License Northrop Grumman Partnership with IIA First User Forum First License US Steel Wal-Mart License AuditNet Partnership TeamMate 1.0 First windows based EWP system in the world TeamMate 97 TeamMate R6 TeamRisk Added to the Product TeamMate R8 TeamTEC Added to the Product TeamMate R9 Complete Database upgrade 1993 1995 1997 2000 2002 2004 2006 2008 2009 TeamMate 2.0 TeamMate 2000 TeamCentral Added to the Product TeamMate R7 TeamSchedule Added to the Product TeamMate Acquired by CCH Entire Team Goes to CCH 5,000 25,000 40,000 50,000 60,000 70,000 Number of end users

The Industry Standard Selected TeamMate Users Include:

TeamMate – Installed Base Quick Facts – as of October 1, 2009 1,800 organizations 72,000 end users Used by the IIA on QARs Adding 3 new organizations per week Licensed in 98 Countries Over 100 Fortune 500 Users 4 of the 5 largest companies in the world Users Include: AICPA American Red Cross Army FDIC ING North America Insurance International Mission Board Institute of Internal Auditors (IIA) Microsoft NAIC Rotary International U.S. Department of Defense

Scalability TeamMate is used by departments ranging in size from 1 to 2,500. We are the large department (over 50 auditors) clear product of choice Over 35 audit departments with over 250 auditors 4 departments with over 1,000 auditors

CCH TeamMate – Here to stay The industry standard – used by twice as many auditors as all other systems combined CCH is part of Wolters Kluwer – a $5 billion company / 20,000 employees CCH is heavily investing in TeamMate 250% employee growth in past 2 years 30% revenue growth over past 2 years TeamMate R9 – the most comprehensive upgrade to date – was released in August 2009 Development of R10 is well underway Continuing to ramp up development resources Continuing to build strategic alliances and partnerships Actionable content is a key area of focus

The TeamMate Community of Users Annual TeamMate User Forum Largest Audit Software Conference in the World 2 Day Conference Four Locations (United States, Europe, Asia, South Africa) 700 Attendees in the United States Formal Focus Groups, Beta Test Groups and Contextual Design Groups

TeamMate User Forum - 2009 Participants from 20 Countries Exhibitors (IIA, ACL, Pentax, PwC) Over 21 Different Courses Breakout Sessions by Industry Vince Poscente – Key Note Speaker

TeamMate Community A place for TeamMate users to obtain TeamMate information and share best practices News and Events Content Downloads (including upgrades and hot fixes) Discussion Support New Content Indicators Activity Updates Favorites E-mail Alerts

Pricing is straight forward. There are no hidden costs or fees. The TeamMate license includes all 5 applications as well as TeamImage (scanning software). The TeamMate license also includes over 10,000 audit steps TeamMate does not require custom source code modification – the interface is highly configurable by the end user Under the special “Competitive Upgrade” program* from October 1, 2009 through December 31, 2009 the TeamMate License includes the first two years of support and maintenance / upgrades * To qualify for the competitive upgrade program, companies must upgrade from Auto Audit, Audit Leverage, AS/2, Auditor Assistant or Pentana to TeamMate from 9/15/09 through 12/31/09

Licensing and Pricing Issue / Exception Follow-up Management Review We believe TeamMate’s favorable license policy is unique. An organization need only license TeamMate for its auditors and can allow broader participation and access without additional licenses as indicated below. No Charge for these users Risk Assessment Process Owners, Risk Assessors TeamRisk includes a web based self assessment model where process / control owners can log into TeamRisk and complete a risk assessment External Review Peer Review, QAR, Regulatory Review, CPA Firm Review If your audit files are subject to an outside review, you can provide TeamMate at no charge to the outside reviewers in order to grant access to the workpapers. Issue / Exception Follow-up Issue Owner / Auditee Issues / audit findings are tracked in TeamCentral. Audit departments can grant secured access to the issue owner allowing direct updating by the issue owner Management Review Management / Stakeholders Audit departments can grant management and other stakeholders access to TeamCentral to view reports on a wide variety of KPIs

Training CCH TeamMate has a world-class implementation and training department. In addition to comprehensive on-site implementation and training services, the following options are also available: Web based installation Web based training Recorded sessions (web based viewing) Extensive on-line training materials Train the trainers TeamMate certification at the CCH Training center TeamMate is highly intuitive – complete EWP training takes just one day. Full Administrator training classes are available

TeamMate Support Support is available via: toll-free phone call on-site assistance the web (e-mail and user community) direct online troubleshooting CCH TeamMate delivers world class support through four regional support centers: United States (Tampa) Europe (London) South Africa (Johannesburg) AsiaPac (Sydney)