Enhancing your audit life cycle through digitisation Taking the - PowerPoint PPT Presentation

Enhancing your audit life cycle through digitisation Taking the next steps February 2020

Welcome Bram Hostyn Timothé Karoui Vincent Gaukema Director | Internal Audit Senior Manager | Internal Audit Senior Manager | Risk Assurance & Data 2

Enhancing your audit life cycle through digitisation Welcome 3

Agenda How can digital solutions add value in each phase of my internal audit life cycle? How do I start the journey towards a more digital internal audit? Which quick wins are out there to gain my first digital audit successes? 4

Move the audit approach upside down: start with data IA on maturity scale Business Predictive enabler analytics Continuous transactional • Normality is learned and monitoring relearned on demand using Continuous advanced scenarios auditing • Automated controls are • Exceptions to pattern and monitored on a real time basis Value to organisation subtle risk concentrations Sustainable and once and potential exceptions exposed • Data repository linked to periodic analytics are flagged to risk and/or key systems accessible by controls owners on a real time • Proactive and predictive Internal Audit basis actions taken Piloting and ad hoc • Analytical scripts are • Dashboards and alerts to • Responsibility to operate the automated and standardized enable IA to monitor program rests with the for specific reviews Manual IA function exceptions and hot spot business. IA are a user and • IA function owns analytical areas on a continuous basis • Analytics is considered as part potentially custodian of the tools such as ACL program of scoping for every IA review • Key input in defining and • Auditing is performed using • Analytics are run on a one off updating the IA plan observation, walkthrough basis to address specific audit or hard copy documents requirements • Audit sampling is statistical and/or judgmental Reactive Predictive Effectiveness in monitoring of key risks 5

How can digital solutions add value in each phase of my internal audit life cycle? The audit life cycle Risk Planning Scoping Fieldwork Reporting Monitoring assessment Ad hoc data analytics Risk heatmap Dashboarding Audit management / GRC tooling Collaboration Process mining tooling Robotics Artificial intelligence 6

How can digital solutions add value in each phase of my internal audit life cycle? The audit life cycle Risk Planning Scoping Fieldwork Reporting Monitoring assessment ➔ Make your risk assessment more visually attractive. ➔ Allows interactivity and increased efficiency ➔ Easy to get there 7

How can digital solutions add value in each phase of my internal audit life cycle? The audit life cycle Risk Planning Scoping Fieldwork Reporting Monitoring assessment Process mining techniques help audit teams to understand the way processes were executed. Based on data, logged by system users, it ensures information that is: ➔ Objective ➔ Up-to-date ➔ Complete A process mining platform will highlight the most riskful areas of the process, and instantly provides comfort over transactions that follow the expected, controlled process path. 8

Scoping through process mining 9

Fieldwork - exception based auditing Risk Planning Scoping Fieldwork Reporting Monitoring assessment Sample-based Exception-based Sample size Analysed Further analyse Analysed expected unexpected population Considerations: Guarantees: Balance between completeness Considers 100% population by focusing on ➔ ➔ and efficiency exceptional transactions. Random sample Covers exceptional transactions through ➔ ➔ Generalisability? bucketing techniques. ➔ Residual risk is quantified in numbers, values ➔ and root causes. Possibilities for reporting and benchmarking. ➔ Possibilities to automate and repeat control ➔ testing strategy on full population. 10

Fieldwork - exception based auditing Risk Planning Scoping Fieldwork Reporting Monitoring assessment Data analytics strengthen the IA fieldwork phase... Start-to-end transactional information ...with process mining as the most advanced technique to steer your fieldwork into the right direction. One-click root cause analysis Effectiveness & efficiency check Objective information Up-to-date information Complete information Strong basis for quantified reporting 11

Fieldwork - exception based auditing 12 12

Visualising and executing fieldwork Risk Planning Scoping Fieldwork Reporting Monitoring assessment Claims & Premiums Analytics Manual journal analysis 3-way match reperformance Duplicate payments 13 13

Demo of dashboard 14 14

Reporting Risk Planning Scoping Fieldwork Reporting Monitoring assessment Is a written report still the way to go in a customer-centric world? What catches the attention of your audience ➔ (AC, Board or management)? Storytelling with Interactive content ➔ Podcast / short film? ➔ VR reporting? ➔ Thinking outside of the box... One thing is for sure, with data analytics your are able to provide clear objective insights and dashboarding. 15 15

Monitoring Risk Planning Scoping Fieldwork Reporting Monitoring assessment 16 16

How do I start the journey towards a more digital internal audit? Guiding principles Methodology People Data ➔ Start small & tests ➔ Half a day self-study on certain tools can already be a great start ➔ Build a team of resources with the right skills Business value Technology ➔ Leverage the right technology and develop and re-usable analytics Strategy ➔ Develop capabilities elements ➔ Incorporate analytics throughout the audit life cycle ➔ Coordinate with other lines of defence / define governance Communication Capability Define your IA Digital Strategy 17 17

How do I start the journey towards a more digital internal audit? Digital upskilling - Merge Technology & Talent 1. Growing a data mindset within your team: 2. The acquisition of advanced technologies: Upskilling your team through 10-20-70 ➔ Going beyond spreadsheets and non-visual ➔ principle: data analytics. Training Invest in latest data techniques like: ◆ ➔ Coaching ◆ Process mining ◆ Guided execution ◆ Visualisation/dashboard tools ◆ Focus on data-skilled staff with: ➔ Automation ◆ Experience in advanced analytics tools ◆ An analytical mindset ◆ A risk & control background ◆ Eagerness to learn ◆ 18

Which quick wins are out there to gain my first digital audit successes? The audit life-cycle Risk Planning Scoping Fieldwork Reporting Monitoring assessment ➔ Risk ➔ Collaboration ➔ Health check ➔ Exception- ➔ Leveraging ➔ Periodical reuse of visualisation via tools statistics based testing fieldwork analysis and heatmap or ➔ Audit ➔ Process mining with: Excel, visualisations dashboards created other graphics management demo Access, ACL, ➔ Show live in fieldwork in spreadsheets software dashboards results to or dashboards management 19

Which quick wins are out there to gain my first digital audit successes? Data-enabled fieldwork per cycle Risk Planning Scoping Fieldwork Reporting Monitoring assessment OTC: IT: Unpaid or outstanding invoices User maintenance activities ➔ ➔ Discounts and price conditions on orders or invoices Transactions and impact generated by powerful IT ➔ ➔ Credit limit evolution profiles ➔ Customer status (blocked/unblocked) Analysis of batch job ownership ➔ ➔ IT ticketing review ➔ PTP: Finance: Duplicate invoices & vendors Manual journal analysis on time of the day and user types ➔ ➔ Expenses review Review of unexpected journal account combinations ➔ ➔ FI invoice analysis Late journal entries ➔ ➔ PO changes Maintenance of fiscal periods ➔ ➔ 20

Key Consider data analytics throughout the whole takeaways audit life cycle Move the audit approach upside down: start with data Merge technology & talent through a 'digital upskilling' approach Are you ready to enter the digital era? 21

bram.hostyn@pwc.com Thank you timo.karoui@pwc.com vincent.gaukema@pwc.com Obtaining slides and schedule meeting: celestine.bastien@pwc.com Highlight your Digital Maturity and scope of planned audits 22