1. Proven practices on how to best automate Financial Statements preparation
Stephan van der Merwe CA(SA)
9 July 2019

2. Why Automation?
Automation has a single purpose: To let machines perform repetitive, monotonous tasks or as some people say “to take the robot out a human”. This frees up time for people to focus on more important, creative tasks that require the personal touch and judgement. The end result is a more efficient, cost-effective business and a more productive workforce. Artificial Intelligence (AI), however, is a science and engineering of making intelligent machines. AI is all about trying to make machines or software mimic, and eventually supersede human behaviour and intelligence. Machine learning as a subset of artificial intelligence. ‘Machine learning enables systems and processes to learn from data, identify patterns and recommend decisions without human involvement. Deep learning is defined as a subset of machine learning where artificial neural networks – algorithms built around the neural structure of the human brain – learn from data.
Talk to example of facial recognition with cellphone – joke about not recognizing your face in the morning
In GOD we trust, for the rest we need data!

3. How to automate? Define the output Understand the user journey
Breakdown in user stories
Statutory requirements, specifically External audit requirements
Can only automate
a process that already exists
Summarize the understanding from session on audit approach
Intelligent automation.
Statutory requirements:
Audit implications
Start with directive 5
Considering the non-function requirements (NFR) e.g. speed, ease of use, technology contraints.

4. What to automate? Output Acquisition of data (Trail balance)
Business rules around AFS
Subject to audit.
Understand the data being use.
Able to drilldown to supporting evidence
Compliance changes
Alignment of mSCOA codes
Personalized requirements
Many to one vs one to many
AFS to users
Iterative process
Audit of dataflow
Auditors requirement to obtain appropriate sufficient supporting documents in order to express an opinion on the AFS. Is the AFS telling the true stories of the municipality. Unqualified AFS
Many to one and one to many – Automation better for many to one. One to many requires creation of data.
What is the story it is telling?
Be good story tellers.
Alignment to mSCOA specimen – Conclude on presentation
Many to one vs one to many – Show in specimen assets

5. Human vs Machine Accounting is telling the story of your entity.
Auditors confirm that the document (AFS) are representing the story of your entity.
How to tell a concise, clear story.
Machines have not yet evolved to this level. Humans need to ensure the story is being tell correctly.
Tools to help you telling your story – Materiality guideline
Refer to the story telling as per the ASB
Authors
How are you telling to story to:
Wide range of service providers
ASB
What
Where
How

6. Materiality guideline