transforming audit through the use of data · 2018-10-22 · collection and validation of core...
TRANSCRIPT
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Transforming audit – through the use of data
Ben Jiang
Director – Data Analytics
October 2018
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Presentation Outline
A bit about the Victorian Auditor General’s Office & recap on our DA roadmap
How we plan to use data as part of our audits of financial reports
Use of data analytics on performance audits
Questions
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The Victorian Auditor-General’s Office & our DA roadmap
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What we do – Audits of Financial Reports
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• Around about 25 audits each year
• Assessing agency performance against criteria
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What we do – Performance Audits
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Our DA roadmap
Wave 1
‘Descriptive &
diagnostics analytics/
Wave 2
‘Predictive analytics’
Wave 3
‘Augmented Intelligence’
2018 & 2019
2020 & 2021
2021+
• Complete streamlining financial data collection and validation processes for all FA audits
• Leverage off earlier investments in data collection to develop sector based dashboards that aide in the execution of planned performance audits (PAs) and selection of future PAs
• Further our roll out off earlier investments in machine learning and artificial / augmented intelligence to produce more effective audits and reports
• Use of DA products and dashboards is ubiquitous
• Widen investment in streamlining collection and validation of core financial data for more entities
• Invest in the collection of relevantoperational and third party datasets which improve audit effectiveness through predictive analytics
• Pilot the use of artificial/augmented intelligence that enhance the predictive analytical capabilities of our audit dashboards and analysis of unstructured data
• Invest in training nominated audit staff as “DA champions” to assist in designing and building dashboards
Improve accessibility to our work
• Invest in streamlining collection and validation of core data needed on selected audits
• Build standardised FA financial cycle and customized PA dashboards to help auditors better plan and undertake audits
• Invest in basic machine learning systems and capabilities
• Invest in training DA staff to develop dashboards and analytics to better support audit divisions
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How we plan to use data as part of our audits of financial reports
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Objectives of our FA Analytics Toolset when complete
Data Analytics Outputs
Improved understanding
Assessingrisks
Tests of controls
Undertake ‘traditional’ analytics
Select samples for testing
Improve data collection
How we report
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Improving data collection: changes to way we collect
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This model allows us to write our analysis once and to have the analysis available across all clients.
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Improving data collection: how does it work
Oracle E-Business
SAP
Other systems
Client 1
Client 2
Client 3
Client 4
Client 5
Client n
Client 6
VAGO system FA Dashboard
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Improving data collection: what your audit team will see
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Improving our understanding
&
Improved focus on risks
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In this next example, we are going to show you how data analytics can be used on an audit of expenditure balances within a financial report
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Improved focus on risks: material areas of selected expenses
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Breaking expenditure up by purchasing stream can help better streamline the way in which we focus our audit efforts
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Improved focus on risks: procurement streams
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Payments to four vendors account for around two thirds of expenditure
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Improved focus on risks: vendor analysis
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Benchmark like entities between each other for improved perspectives on risks and where to focus audit attention
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Assessing risks: benchmarking
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Undertaking more targeted analytics
&
Selecting more targeted samples
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Selecting more targeted samples: super contributions
Benchmarking of employer super contributions against base pay
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Running analysis over payroll is only a few clicks away
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Selecting more targeted samples: overtime payments
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In this example, we examine the top 6 employees receiving over overtime between years and comparative periods.
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Drilling down on potential outliers and comparing between years
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In this example, we will look at how a benfords analysis can help target our testing of order splitting.
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Selecting more targeted samples: order splitting
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Reporting
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Something simple – Results of 2017 audits: Universities
https://www.audit.vic.gov.au/report/results-2017-audits-universities?section=32835
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https://www.audit.vic.gov.au/report/annual-report-2017-18 24
Something simple – workforce statistics
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Something more sophisticated – Results of 2017 audits: Local Government (under development) – Part A Sector Overview
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Something more sophisticated – Results of 2017 audits: Local Government (under development) – Part B Component Overview
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Our performance audits
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Our approach
Selection of Performance Audit Topics
Performance Audits
Reports to Parliament
focus of this session
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Selection of performance audit topics: environmental scanning
Sector Dashboard (capture what we don’t know / need to know)
Structured data
Unstructured data
Know your council
Grants commission
Other sources
Social media
Hansards
Other sources
current work
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Sector dashboard – what it looks like in summary
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Sector dashboard – what other analysis can it produce
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Sector dashboard – holding all this together
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Mining of unstructured text – futureCondense reading time and identify topical issues of interest from large volumes of unstructured text.
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Questions?If you would like to know more about the Victorian Auditor-Generals Office’s work on the local government and planning sectors, please contact:
Sheraz Siddiqui Performance Audit Sector Director Local Government & [email protected]+ 61 3 8601 7128
Tim LoughnanFinancial Audit Sector Director Local [email protected]+ 61 3 8601 7086
For further information about anything within this presentation or our data analytics initiatives more broadly, please contact:
Ben JiangDirector – Data [email protected] +61 3 8601 1689