1. Leveraging Data Analytics to Enhance Internal Audit Effectiveness
Shane Kenney
PwC, LLP

2. Agenda The power of audit analytics What we’re seeing in the market
When and where should we use audit analytics?
Data analytics for key business areas
Data visualization overview and concepts
Question and answer session
* Discover innovative ways to integrate data analytics into your audit programs.
* Explore tests that you can develop to search for potential fraud, waste and abuse.
* Expand your audit knowledge by understanding the potential impact of data analytics.
* Learn how you can support your company's governance functions through data analytics.

3. The power of audit analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

4. What is audit analytics?
The process of utilizing data to gain deep insight into business processes to facilitate the audit process of an organization.
Repeatability
Action
Relevance
Assurance
Ask how each of these will impact auditing in your organization?
Assurance: Greater assurance over a broader areas of your organization.
Repeatability: Ability to leverage these tests over several audit cycles to monitor improvement. Initial invest; cost recovery
Relevance: Get at the heart of current issues in a timely manner
Action: Gives management the details to support change within their organizations.
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

5. Analytics value & maturity
What Happened?
How Much/Often?
Why is it happening?
Will this trend continue?
Most likely to happen?
What’s the ideal state?
Standard Reporting
Ad-Hoc Reporting
Statistical/Targeted Analysis
Forecasting
Predictive Modelling
Optimization
Degree of Analysis
Degree of Intelligence
Mastering “What”, “How” and “Why” has become a necessity for Audit
Adapted from “Win With Advanced Business Analytics: Creating Business Value From Your Data” by Jean Paul Isson and Jesse S. Harriott
Floor
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

6. Technology is changing how we audit…
Opportunities
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

7. Value proposition
The implementation of data analytics within a well-defined internal audit plan will yield significant value across many functional areas
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

8. What we’re seeing in the market
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

9. PwC 2013 state of the profession survey
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

10. Where are Internal Audit organizations today?
Assess where your organization is in this continuum?
Goals should be to gradually advance to the next level
Emphasis should be on progression AND maintenance
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

11. When and where should we use Audit Analytics?
Overview
Market
When & Where
Key Business Areas
Data Visualization

12. Overview of Audit Analytics Within the traditional audit analytics lifecycle
Specific controls testing analytics are prevalent in many organizations;
Planning and monitoring are areas where many organizations stop for a variety of reasons; organizational, data availability, dollar amount
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

13. Auditing life cycle – Risk assessment
Analytics within the risk assessment process can be used to assist in designing and developing quantitative risk metrics localized to a business unit or process, or to cross-reference risk across the audit universe
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

14. Auditing life cycle – Audit testing
Analytics used throughout the audit testing cycle including planning, assessment and delivery
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

15. Auditing life cycle – Monitoring
Analytics within monitoring is used to operationalize regular reporting of Key Risk Indicators (KRI’s) however other KPI’s and dashboards focused on controls and performance are being considered based on audit focus
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

16. Leverage analytics earlier in the audit process
Traditionally, audit analytics teams have assisted during the fieldwork process
Analytics teams can work more effectively with Audit teams in the preliminary stages by
Creating Self Service Analytic packages for use by auditors within scoping
Obtaining data sets before fieldwork to help create focus areas
Can be done with minimal Analytics team involvement using self-service capabilities
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

17. Information management – Leading practices
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

18. What are success factors of leading IA functions?
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

19. Analytics skills and tools– Leading practices
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

20. Data oriented culture – Leading practice
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

21. Leading industry technology solutions Major vendors within the audit analytics space
To have an effective audit analytics program for a complex organization, there is no “one size fits all” for technology. An analytics toolbox is necessary to bring the highest value
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

22. Data analytics for key business areas – some examples
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

23. Data analytics for key business areas – T&E
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

24. Data analytics for key business areas – Procure to Pay
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

25. Data analytics for key business areas – Order to Cash
Other areas:
Inventory – obsolescence, warehouse levels
Pricing – price changes
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

26. Anti-Fraud Controls Can Make a Difference Median Loss Based on Presence of Anti-Fraud Controls The ACFE’s 2012 Report to the Nation
Partnering with management to allow them to monitor and review their organizations can greatly assist decreasing loss.
Source:
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

27. Data Visualization Overview and Concepts
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

28. - Andy Kirk, “Data Visualization – a successful design process”
Visual Analytics
Visual Analytics is the representation and presentation of data that exploits our visual perception abilities in order to amplify cognition
- Andy Kirk, “Data Visualization – a successful design process”
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

29. Value of Data Visualization
More impactful messages to management in reports; within audit plans
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

30. Value of Data Visualization
Ability to “notice” causal relationships between data discrepancies.
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

31. Data Visualization is Everywhere
Adding geographic dimension can assist in determining operational effectiveness.
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

32. Data Visualization Tools
Large amount of players in the market place based on individual organizations needs.
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

33. Data Visualization Examples Associative analysis
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

34. Data Visualization Examples Dashboarding and other high-level analysis
Audit Analytics
Overview
Market
When & Where
Key Business Areas
Data Visualization

35. Question & Answer Session
Contact information:
Shane Kenney, Risk Assurance
PwC, LLP
500 Woodward Avenue
Detroit, MI
# (office)
# (cell)
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