KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS QUALITY + INSIGHT = VALUE KPMG AUDIT The KPMG Audit Powered by Data & Analytics A Data & Analytics Discussion March 4, 2016

KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS AUDIT 2020: A FOCUS ON CHANGE kpmg.com/us/audit Based on a survey of 151 U.S.-based respondents, including audit committee chairs and members, C-level financial executives, audit associates and accounting students. 93% of survey respondents believe “Audit needs to better embrace technology” Most cited benefits of technology are 59% Increased efficiency 58% Better tools for sophisticated analysis Three-out-of-four auditors rank the audit profession as on par or behind in technology with its clients and other industries WHAT EXTERNAL FORCE WILL BE KEY? Technology HOW WILL AUDIT TRANSFORM? is transforming how audits are conducted, enhancing audit quality and effectiveness has the greatest impact on the audit profession 53% Data & analytics say BIGGEST CHALLENGES IDENTIFIED are seen as the biggest challenges to enhancing the role of D&A in the audit. 58% say See Culture 66%59% See Regulatory Environment

KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS What is Data and Analytics? ■Solid handle on data available throughout the organization, enhanced with access to relevant 3rd party data ■Strong information management to fully access and leverage the organization’s data ■Technology capability to transform big data into actionable data for qualitative and quantitative analytics Keys to Success Data is raw material that becomes valuable through the use of analytics. Big Data requires advanced analytics and technology to capture the value. Purchases Customer Data Competitor Actions Machine Data Economic Factors Log Files Media General Ledger Controls Sales Call Center Audit Quality Risk Warnings Financial Insights Issue Isolation/Identification Causality Insights Process-Level Insights Automated Action Better Informed Judgement Data Transformation, Visualization & Analytics $ $

KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS How Data and Analytics is Used in Business Business has fundamentally changed – an organization’s competitors (known and unknown) are harnessing data to drive growth and profitability now ■Understanding the non-obvious connections in the complex, global and ever-changing economy ■Dynamic analytics solutions improve agility. These solutions: –Automatically identify relevant changes in the constantly changing environment –Account for the effects of those changes on your business –Provide sound decision support within this context ■Holistically address the growth, efficiencies, and risk mitigation agendas Online Videos: Effect on In-store video rentals with recommendation engines and easy delivery Insurance Companies: Impact of dynamic pricing for profitable customer acquisition Smart Thermostat Technology: Imminent impact on utility company profitability Chip Manufacturers: Impact on auto manufacturer supply base during the Great Recession Keys to Success

KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS The KPMG Audit Powered by Data & Analytics

KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS The KPMG Audit Powered by Data & Analytics OVER 5 YEARS ENHANCED QUALITY CURRENT OF EXPERIENCE WITH DATA ANALYTICS DATA DRIVEN TECHNOLOGY USING TECHNOLOGY USE OF AUTOMATION + DATA ENABLES 2 BILLION+ DATA ANALYSIS POPULATION SAMPLING HISTORICAL MANUAL AUDIT THAT WAS PAPER-DRIVEN ANALYSIS SNAPSHOT OF A SMALL % OF SELECT TRANSACTIONS IN A DATA POPULATION SAMPLE ANALYSIS WITH LIMITED TRANSACTION COVERAGE PATTERN ASSESSMENT FUTURE TECHNOLOGY INVESTMENTS ENABLES 100% ANALYSIS FULL POPULATIONS OUTLIERS + ANOMALIES DATA ANALYSIS OF BENCHMARKING INTERNAL INDUSTRY PEER IDENTIFY PROCESS IMPROVEMENTS BUSINESS PERFORMANCE TRENDS

KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS The KPMG Audit Powered by Data & Analytics

KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS The KPMG Audit Powered by Data & Analytics Actionable Insight Reporting Issuance of Audit Opinion Historical data file Created from prior year’s Risk Assessment, Account/Assertion and Rollforward Routine External data Company results Company data External data RISK ASSESSMENT D&A is used throughout the audit process Automated audit procedures ERP-enabled audit procedures Journal entry deep dive KPIs INTERIM TESTING Account pairing Predictive account analysis Financial flow visualization Automated audit procedures ERP-enabled audit procedures KPIs PLANNING & RISK ASSESSMENT COMPLETION (ROLLFORWARD AND FINAL TESTING) Automated audit procedures ERP-enabled audit procedures Journal entry deep dive KPIs

KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS Data Powered Planning Demonstration Data Powered Planning Financial Flow Visualization shows the general ledger flow of transactions to help rapidly identify manual “risk points” in financial recording and reporting processes RevenueS Other receivableS Trade accounts receivable, netS Cash and cash equivalents Trade accounts payable $241, $12,713, $4,619,94.22 $135, $95, $509, Revenue Balance Sheet $6, $3,257, $4,720.63

KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS Rapid analysis of all journal entries, and advanced tools to identify those journal entries indicating additional consideration by our professional standards. Interim Testing Data Powered Testing - Journal Entry Deep Dive

KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS Data Powered Testing – ERP-enabled Audit Practical Examples PROCEDURESENHANCEMENTS TO AUDIT QUALITYBENEFITS TO YOU Revenue and Accounts Receivable Identifies discrepancies in price and quantity between invoices, sales orders and shipping documentation Identifies stock-outs and customer orders outpacing shipped products Segregation of Duties Pinpoints areas of increased risk by identifying incompatible duty assignments and specific transactions where such duties occurred Identifies process improvement opportunities related to users having the ability to perform two or more incompatible duties and specific transactions that could warrant management attention (e.g., process, control or business opportunity improvement) Fixed Assets Analyze fixed asset sub-ledger for changes to in-service dates, useful life and salvage value Identifies changes that might be an opportunity to improve or update accounting policies, procedures and processes

KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS Segregation of duties analysis Conflicting authorization used in purchasing transactions

KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS Segregation of duties analysis (continued) Conflicting authorization used in purchasing transactions Potential risk where 7 users posted $10 million in transactions with conflicting authorizations: goods/service receipt entry, A/P invoice entry, and payment approval After investigating the underlying transactions and discussing with the client, we may conclude there is little or no risk here. The business may wish to streamline authorizations and eliminate a potential control deficiency related to the number of individuals with conflicting duties.

KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS KPIs obtained from KPMG’s proprietary databases and publically available information are used to benchmark companies across their industry providing insight into operational and financial risks Completion – KPIs

KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS Security of data will remain a key issue going forward Engagement with standard setters, regulators and clients toward a common goal Universities and auditors alike must embrace this evolved approach to understanding a client The future will require deeper training in new areas Understanding of non-traditional disciplines (IT, risk management, statistics, forensic) The KPMG Audit Powered by Data & Analytics

KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS “Bringing our D&A capabilities to the audit is an evolution, not a revolution, and the delivery of the audit will transform over time. Our expectation is that audit professionals can deliver the most value not only by focusing on individual tools or the extraction of data, but especially on the application of professional judgment to the results of the D&A capabilities. This means our people will investigate and understand the business reasons behind identified anomalies and exceptions and will make the appropriate judgments during the audit based on these results.” Roger O’Donnell, Partner Global Head of Data & Analytics – Audit The KPMG Audit Powered by Data & Analytics

KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS Questions KPMG Audit Powered by Data & Analytics

KPMG AUDIT QUALITY + INSIGHT = VALUE © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS QUALITY + INSIGHT = VALUE The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. The perspectives of survey respondents do not necessarily represent the views of KPMG LLP. © 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. David Seay Partner Kansas City Audit Practice Leader Michael Remmert Manager Kansas City Audit Practice