technology for business assurance copyright © 2010 acl services ltd. acl business case

Technology for Business Assurance

Copyright © 2010 ACL Services Ltd.

ACL Business Case


2ACL Services Ltd.

Business Case Outline

ACL Introduction Impact to the bottom line – Revenue leakage: Errors & Fraud Primary goals: Why ACL? ACL solution functional diagram

– High level report Analytic packages: prebuilt scripts ACL client results Summary of savings Pricing Sequence of Events


3ACL Services Ltd.

ACLIndustry Leader21 Years of Business Assurance Solutions

11,000+ organizations in 150 countries

Fortune 100 95%

External Audit : Big 4 Audit firms 100%

Global 500 70%

Fortune 500 85%

Commercial

Public Sector

Public Accounting / Business Services

200+ departments in 37 national governments

500+ regional, state and local governments

Wells Fargo Foothill


4ACL Services Ltd.

Impact to the bottom line – Revenue leakage: Errors and Fraud

Revenue Leakage Calculator


5ACL Services Ltd.

Primary GoalsGoal ACL Impact

Proactively monitor risk exposure Quantify errors/revenue leakage through daily/weekly/monthly continuous monitoring. Recover money in a timely manner. Ability to fix controls before problem grows.

Reduce time and resources spent on manual controls testing for SoX 404 Certain repeated SoX controls testing can be performed by ACL on a continuous automated basis.

Reduce time and resources spent on manual processes to report on financials or exceptions Today: Manual process from SAP to Access to Excel. Takes a day to report for each month. Data integrity can be lost due to Excel.Reduce other manual hours spent on error verification (i.e. Check matching to Vendor invoices) – receive error exception report before checks are sent.

Automate data access from SAP and other data sources, run prebuilt tests within ACL, export results/exceptions to: centralized library email notification dashboard reportResults can be exported daily or run on adhoc basis, taking minutes – hours depending on complexity of test.

Identify control weaknesses. Proactively identify control breaches i.e. split transactions, duplicate payments, transactions just below thresholds

Take preventative measures to improve business process controls:Purchase to Payment | Payroll | Travel & Entertainment | Order to Cash | General Ledger

Use proven prebuilt scripts that ACL clients have found the most revenue leakage and fraud in high risk areas.

Alignment with internal and external audit Internal audit can leverage analytics and results for their audit plan.External audit can rely on ACL results, increase effectiveness of audit engagements. Utilize the same solution that the Big 4 uses and is familiar with.


6ACL Services Ltd.

Continuous Auditing

Access virtually any data source and automate data feeds

Automatically distribute exceptions found during data analysis testing to multiple business stakeholders

Automation – Built-in Analytic Scheduler Server Analytic Processing Power

Content Management – Any File Type

Enterprise Data

SQL

ERP


7ACL Services Ltd.

High level report example


8ACL Services Ltd.

Analytics – Areas of Focus

Package: Purchase to Payment (35 scripts)

Category: Requisitions Purchase Orders Receiving Payables Payments

Bundles: Limits – single and split requisitions

Authorization – creating and approving

Data Validity – critical data fields

Segregation of Duties – creator/modifier vs approver

Purchasing limits – single and split PO

Order Authorization – Unauthorized purchaser

Data Validity – critical data fields

Segregation of Duties – creator/modifier vs vendor master record creator/modifier

Two Way Match – quantity variance: goods receipt vs PO

Data Validity - critical data fields

Segregation of Duties – goods receipts creator/modifier vs PO creator/modifier/approver

Limits – single and split invoices

Timing – retroactive PO’s Two Way Match – amount

variance: PO vs Invoice Data Validity - critical data

fields Segregation of Duties –

invoice approver vs PO or goods receipt creator/modifier

Suspect Vendors – prohibited, phantom vendor, unusual activity, 1 time vendors

Unaccrued Liabilities – good receipt w/o invoice after period end, invoices after period end

Two Way Match – amount variance: payment vs invoice

Duplicate Payments - 6 different types

Data Validity - critical data fields

Segregation of Duties – payment approver vs PO creator/modifier

Suspect Payments – manual payments, missing vendor information

# of scripts:

5 6 3 14 7


9ACL Services Ltd.


Package: General Ledger (22 Analytics)

Category: Validation & Profiling Journal Entry Testing

Bundles: Validation of Trial BalanceAnalysis of Month End Balances (SAS99)Validation of Control Accounts (SAS99)Profiling of Suspense Accounts (SAS99)

Data Validity Duplicate Journal Entries Segregation of Duties Suspicious General Ledger Accounts Suspicious Journal Entry Dates Suspicious Journal Entry Amounts Suspicious Journal Entry Description Invalid Account Classification Period Close Cut-Off Reversed Journal Entries Temporary Accounts Unreconciled Journal Entries

# of Scripts: 4 18


10ACL Services Ltd.


Package: Cost Management (23 Analytics)

Category: Accounts Payable Accounts Receivable Employee Transactions

Bundles: Vendor Payments Duplicate Payments Phantom Vendors Vendor Master Vendor Discounts Purchase Authorization

Limits

Customer Credit Sales Orders to Purchase

Orders

Payroll Travel & Entertainment

Expenses Corporate Credit Cards

# of Scripts: 12 5 6

Starter Pack (10 Analytics)

Utility Scripts

Split Transactions Incorrect Totals Even Dollar Transactions Transaction Aging Fuzzy Name Matches Matched Join High Standard Deviation Transaction Volume Summary Duplicate Transactions Suspicious Date Range

10


11ACL Services Ltd.

ACL client results:

Engineering & Construction firm: San Francisco, CA– Purchase to Payment, Travel & Entertainment– Six Sigma focus– Savings of $140K/year in labor hours– Control/process errors especially in T&E

Manufacturing: Becton, Dickinson & Company– Purchase to Payment, Order to Cash and Payroll– First nine months – identified 4K duplicates worth $1.2M– Pre-controls monitoring 5000 control tests – reduced SoX compliance costs– Provided management assurance every procurement transaction subjected to 44

control tests


12ACL Services Ltd.

ACL client results:

Biopharmaceutical: Talecris Biotherapeutics– P2P, T&E, Pcard, G/L, Payroll, Order to Cash– Manual processes, weak controls over cash mgmt– Found fraud rampant in troubled economy– 5 out of 60 centers = ~ $2M in fraud found

Manufacturing: Illinois– Updated all controls before ACL implementation; found $17K in duplicates

first week– Found plant in China had employees reselling precious metals back to

company (worth in millions)– Due to ACL analysis, putting GPS trackers in trucks to track total distance

and travel time to ensure no drug trafficking


13ACL Services Ltd.

ACL client results:

Thomson SA: France, EMEA– VAT tax team – existing spreadsheet software had limited file capabilties,

slow calculation speeds, and did not provide Sarbanes-Oxley compliance capabilities.

– “ACL has revolutionized our audit methodology. We can now analyze large data files from SAP and cross-reference the information to find errors and controls gaps” – VAT Manager


14ACL Services Ltd.

Summary of savingsYear 1 Year 2 (or Phase 2) Total

Recovery of Errors (potential – on low end)Vendor Payments error % by industry + T&E payments error % by # of employees + Fraud %

Ie. $9 050 000 1% of total potential = $90,500

Reduced manual labor hours – Excel reports Ie. 6 hours * $30/hour x 12 months= $2,160

Reduced manual labor on SoX controls testing Ie. 20 hours * $30/hour x 12 months= $7,200

Reduced manual labor hours – Check matching to Vendor invoices

Reduced time extracting data for external auditors

# hours to build and automate 45 control tests in Excel for Purchase to Payment, T&E, Payroll, Order to Cash, General ledger

Total possible estimated soft & hard cost savings* Not including increased areas of scrutiny that are not monitored today

Total ACL solution

Total ROI (excluding full potential of errors/leakage found)


15ACL Services Ltd.

FREEDOM FROM DOUBT ™

technology for business assurance copyright © 2010 acl services ltd. acl business case

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