Audit Webinar: Surefire ways to succeed with Data Analytics

Download Audit Webinar: Surefire ways to succeed with Data Analytics

Post on 21-Feb-2017



Data & Analytics

1 download


<p>PowerPoint Presentation</p> <p>SUREFIRE WAYS TO SUCCEED WITH DATA ANALYTICSWebinar </p> <p>PresenterLenny BlockAssociate Vice President NASDAQ Internal Audit</p> <p>AGENDAWho is NASDAQ?What are the barriers to using Data Analytics?How do you increase and expand use of Data Analytics? Business and technology applications What skills are required? Gaining internal management supportMeasure staff utilization and effectivenessTakeaways &amp; benefits to your organization</p> <p>Who is Nasdaq?More than a stock exchangeMultiple exchanges and clearing houses - NY, Philadelphia, Boston, Nordics, Baltics, Canada, EuropeListing venue for publicly traded companies to raise capital (IPO)Multiple asset classes (equities, options, commodities)Corporate Solutions Investor relations, public relations, multimedia solutions, governanceMarket Technology Trading and data solutions to exchanges, alternative-trading venues, banks and securities brokers Internal audit team - 20 worldwide - NY, Maryland, Philadelphia, Stockholm, Vilnius</p> <p>barriers to using analyticsWe know Analytics are importantWhile majority of internal audit leaders and C-suite executives agree data analytics is important to strengthening audit coverage, only a small percentage of organizations are actively using Data Analytics regularly What are the barriers to starting, sustaining and expanding the use of Data Analytics?</p> <p>barriers to using analyticsFrustration: Natural reaction during implementationOccurs for the following reasons: Lack of technology skillsNo experienceNot knowing how to incorporate a Data Analytics tool into the audit Source data - How to load it into the tool? Assessing progress</p> <p>Increasing use of data analyticsEliminate frustrationThese are familiar conceptsSmall success using analytics builds confidence and shows valueData Analytics is not a magic wand</p> <p>If you do not know where you are going, any road will get you there. -- Lewis Carroll</p> <p>Business, Technology applicationsData Analytics can help to achieve audit goals:What audit objectives we want to achieveWhat questions about our data do we want answeredValidation of assumptions about whether systems are programmed correctlyInvestment that pays off, requires perseveranceExpanded coverageBetter understanding of the dataIntegrity of the data preservedWill uncover concerns in other areas</p> <p>Data Analytics helpData Analytics helps with the following audit objectives:Validate data accuracyDisplay data in different ways Prepare data for analysisIdentification of strange items, exception testingCompleteness (gaps, matching)Validity of formulas and calculationsEdit checksCompliance testingRelationships (fuzzy logic)</p> <p>The challengeThink outside the boxExamples of traditional and non-traditional ways data analytics tools can be used</p> <p>business applicationsTechnologyUtilize tools that are both business application and technology focusedLog filesAccess ReviewsAlerts</p> <p>Email logsCommon testsSummarize emails by service providerSummarize and sort numbers of emails by employeeIsolate, summarize and examine personal emailsStratify emails by time and examine any unusual activity (e.g., lunchtime, weekends, bank holidays)Analyze incoming emails and identify common domain addresses</p> <p>Email logsCommon testsCalculate and sort length of time employees spent on email in a given time periodMatch emails with a list of employees and extract any emails that were sent by non-employees Analyze any dormant accountsIdentify non-work related emails by searching for specific words</p> <p>Access rights </p> <p>Identify accounts with:Passwords not set or not required for accessPasswords &lt; the recommended number of charactersAccess to key directoriesSupervisor statusEquivalence to users with high level accessThat have not been used in the last 6 monthsGroup membershipsAge password changes</p> <p>Systems logs</p> <p>Identify accounts with:Access outside office hours (Holiday/Sick LeaveUsers, particularly those with supervisory rightsPerform data analysis by user Summarize by network address to identify: All users with their normal PCs or all PCs with their normal usersUsers on unusual PCsSummarize charges by user for resource utilizationAnalyze utilization by period to show historical trends ie: daily, weekly, monthly</p> <p>File access &amp; ManagementMonitor file activity and user behaviorPrevent data breaches and assists with permissions managementMonitor every file touchKnow when sensitive files and emails are opened, moved, modified or deleted</p> <p>RegulatoryRule Book ValidationIndependent validation of software algorithms utilized to ensure compliance with rulesFor example: To list on a national stock exchange and to remain listed companies must meet comprehensive qualitative and quantitative standards for both the company and the securities offered.</p> <p>Ethics FCPA ComplianceFCPA Act - Enacted in 1977Impact of billion dollar finesFCPA compliance is focused fraud analytics geared to bribery and anti corruption of government officialsOne can not identify corruption straight up but you can identify red flags for follow-up</p> <p>Cost of FCPA Non-ComplianceTop ten FCPA enforcement actions (Average fine: $65 million)1.Siemens(Germany): $1.6 billion in 20082.Alstom(France): $772 million in 20143.KBR / Halliburton(USA): $579 million in 20094.BAE(UK): $400 million in 20105.Total SA(France): $398 million in 20136.VimpelCom(Holland): $397.6 million in 20167.Alcoa(USA): $384 million in 20148.Snamprogetti Netherlands B.V./ENI S.p.A(Holland/Italy): $365 million in 20109.Technip SA(France): $338 million in 201010.JGC Corporation(Japan): $218.8 million in 2011 (Sources: FCPA Blog and SEC Websites)</p> <p>Fcpa complianceHow we use Data Analytics to ensure FCPA Compliance:Identifying spending trends of vendors, contractors, employeesProhibited list screening Risk Scoring to identify high risk vendors, contractorsSupplemental traditional AP analytics</p> <p>Other keys to successRepeatable- ProductionalizeOnly need to refresh dataVisualizationEasily Interpret and summarize data in user friendly wayDrill down into the underlying dataPicture worth a thousand wordsJust like auditing, data analytics is an iterative process, one set of results provides additional questions and the next step in your analysis</p> <p>Skills setsCritical thinkingUnderstanding the businessFamiliarity with automated solutionsData extract query tools are already built in to ERP and other systems today. SAP, PeopleSoft, HyperionCreative problem solvers, what do I want to know about the data?</p> <p>Skills setsNot afraid of data and technologyRelational Database concepts versus ExcelWilling to adapt and grow their skill sets - Necessity for their careersInvestment of time to learn Trial and errorPerseverance</p> <p>Gaining Management SupportA necessity made easierTo search manually for irregularities is almost impossible Information is more complex Automated tools are easier to use than beforeTo rely only on professional judgement can be subjective or based on poor information</p> <p>Supplements Traditional AuditData Analytics is a supplement to traditional audit techniques Expanded coverageBetter understanding of the data Uncover concerns in other areas beyond the current area of focus Data Analytics allows can grow into a continuous monitoring or continuous auditing program Red flags resulting from data analytics can be used to develop a targeted scope for a traditional audit, drilling down to root causes and control gaps</p> <p>Standards Have Changed</p> <p> Critical Thinking Advanced Fuzzy Duplicate Trend Analysis PLANNING Data Discovery Data Sampling Visualization Data Insights Identify trends Trend Analysis &amp; outliers Benfords Law Analysis Focus the Audit DATA INTEGRITY CaseWare Analytics Profile your DataToday Data Analytics is a requirement rather than a recommendationHighlighted in the IIA standards under Proficiency where auditors need to have sufficient knowledge of technology-based audit techniquesto do their work</p> <p>Staff Utilization &amp; EffectivenessBuild in to the methodology:Require the auditor to address before fieldwork begins how analytics will be used.It can be as simple as profiling data to determine sampling approachSample selection itselfTie analytics to compensation and incentives</p> <p>Takeaways &amp; BenefitsThink outside the boxA necessity Standards now include data analyticsMake it about the audit objectives, not the toolExpanded coverageBetter understanding of the data Better defense with regulatorsmitigates actions of rouge employeesLets people know we are watchingJob specific training (ie: anti-corruption activities)Provide employee incentives to learn and use analytics</p> <p>Learn more about CaseWare IDEA Data Analysis</p> <p>Contact us at to schedule a demonstration</p> <p>SUREFIRE WAYS TO SUCCEED WITH DATA ANALYTICSWebinar Visit Email </p>