Technology in the PwC Audit Driving innovation · 2017-05-31 · At PwC, we are driving audit...

Technology in the PwC AuditDriving innovation

www.pwc.com

© 2016 PricewaterhouseCoopers LLP. All rights reserved

Contents

Driving innovation

2 Technology in the PwC Audit

At PwC, we are driving audit innovation, with technology at its heart. The ability to merge market-leading technology with the skills of our people and a robust audit approach is now central to our global audit strategy and delivery. It is the fusion of these three elements that defines our value and drives the audit. The result is quality, efficiency and insight, delivered in equal measure.Humphrey Choi | China, Hong Kong and Asia Pacific Assurance Leader

People Approach Technology The PwC Audit


We are at the forefront of the profession in the way we are re-engineering and bringing innovation to the audit with three unique technologies — Aura, Halo and Connect.

Our global ERP system driving global quality

and consistency

Market-leading technology that is revolutionising our audits by

harnessing the power of data

A collaborative workflow tool allowing fast, secure

information sharing

Aura Halo Connect


Aura, our single instance software, ensures that things are done one way — the rightway — consistently and efficiently, globallyand locally. It is used by 87,000 auditors worldwide, on every PwC audit. The result is all of the elements of our audit fitting together seamlessly.


Risk Process Reference Inherent Risk Expected Controls Reliance AssertionsPlanned SubstantiveEvidence

Aura. Our global ERP system driving global quality and consistency.

Aura’s key benefits:

Single instance global software with embedded industry IP enabling consistency, synergy and scale.

A systematic risk-based approach, meaning we focus on the things that matter.

Workflow technology that allocates audit procedures and individual tasks on personalised dashboards, enabling the timely execution and review of work.

A workshare feature designed for shared service centres and multi-location audits, allowing us to work collaboratively, eliminating duplication.

Real time monitoring of engagement quality and progress — available on mobile devices, any time, anywhere.

1

2

3

5

4

Quality checks built in Aura has built-in quality checks, helping teams determine the right level of work

Reduces duplication and omission Aura comes with preloaded risk software that helps us identify the right risks and do the right work against them

Intelligent risk assessment Risk settings enable teams to tailor Aura to specific scenarios, taking account of risk levels, controls reliance and substantive testing

Risk benchmarking and insight Aura allows us to benchmark across our client portfolio and provide valuable insights


Aura workflow technology. Enables appropriate review and supervision of audit work.

Automated workflowAura’s workflow technology allocates audit procedures and individual tasks, tracked on personalised dashboards

Innovative interfaceIn-built voice recognition enables teams to work with the technology in new ways


Aura Now. Real time, on-the-go information on the quality and status of engagements.

Access on the goAura Now acts as an early warning system, providing real time information on the quality and status of engagements

Focusing effort With just a few clicks on a smartphone, tablet or laptop, progress can be visualised, highlighting areas where we need to focus

Alerts14

FSLIs not in scope above PM 1

FSLIs in scope with no EGAs 2

Non-standard risk slider settings 1

EGAs with out of date content 1

Risks with assertions without EGAs 1

Signifi cant risks with no test of details 1

EGAs with >= 5 assertions 1

Custom EGAs with no tailored 1

Exceptions with no CD/W 1

Substantive exceptions with no 1

All engagements

15:33 100%

Progress%

All engagements

Overdue1

Deadline approaching

On track

13

82

Reviewed-fi nal4

434

15:33 100%15:33 100%

14 Alerts

My tasks145

Due434

All engagements

Early warnings Aura Now’s powerful monitoring and analytics capabilities enable a smooth close process


Count. Automates the recording of inventory count testing.

Initial procedures

Test counts

Tag/Sheet to Floor

Floor to Tag/Sheet

Questions

Tag/Sheet summary

Cut-off

Conclusions

1%

87%

0%

8%

0%

100%14:324G 100%14:324G

0%0%3%

1 2

Test Counts | Questions

Tag/Sheetto Floor

Floor toTag/Sheet

Questions

Test Count Wall to Wall

1. If packaged contents in standardsealed quantities either vendor orentity packaged) were on handdid we examine the contents andcompare it with label descriptionsfor some packages?

Yes – provide details of ourexamination and the basis of ourselection of packages

No – provide rationale fornot examining the contents ofpackaged...

Viewing as Magdalena Nandsik

CountMetro_1EngagementABC_Count_UATLast server sync: 08 August 2016 2:31pm

Status

Initial procedures

Test counts

Tag/Sheet summary

Cut-off

Conclusions

© 2010-2016 PwC. All rights reserved. PwC refers to the PwC network and/or one more of its member fi rms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

Sync

Submit

0%

0%

8%

0%

?

Switch instance

100%14:324G

Real-time syncingEnables real time tracking of status by engagement teams

Submit results for inclusion in AuraSummary of results are aggregated for export into Aura

Quality and consistency A standard set of questions is completed to conclude the process

At a glance status Overall status capturing inventory count progress


Company ABC Herb LesterData from PwC’s ClientDetail to Confi rm Your response per:

PwC’s Confirmation System. Automates the end-to-end external confirmation process.

Streamlined process Details are entered once and tracked throughout enabling a secure and efficient process

Secure and ISA compliant

Automated system Automates the process including export to Aura and supports paper confirmation

AccessibilityThe enhanced process works for most types of confirmationand includes a language translation capability

In-built logic and visual indicators Enhances user experience for both auditor and confirmer


Halo, PwC’s data auditing technology, is revolutionising our audits, enabling greater assurance and deeper insight by harnessing the power of data. It scans huge volumes of business-critical data, enabling improved risk assessment, analysis and testing, and unlocking insight.


Company ABC 2015.01.01 – 2015.12.31Journals

Cash

and c.

..

Operat

ing...

Operat

ing...

Suppor

t tr...

Gross

inve

...

Gross

sal...

Cost o

f sa..

.

Cost o

f sa..

.

Gross

sale.

..

Gross

inve

...

EllisIsa

acLia

mSte

ve

Reece

Steve

Liam

EllisIsa

ac

Reece

Randy

Reece

Isaac Ellis

Liam

Randy

Reece

Steve

Liam

Isaac

Automated vs manual

% manual 54%

Top 5 manual users

Top userEllis

Dashboard30,178Total no journals

3,168Journals < GBP 10

7.2Average lines per manual journal

7Number of users

1Users posting < 10 journals

Company code

Selection: All

Bottom 5 manual users

Bottom user Randy

Top FSLI Gross inventories

% manual 4%

Top user Steve

Bottom userRandy

Currency: Common rate

Selection: GBP

Top 5 FSLI

Top FSLIGross sales

Value GBP (m)21.3

Volume274,037

Volume1,332

Volume577

Volume3

Value GBP (m)146.6

Value GBP (m)55.0

Value GBP635,102

Common rate

Local

Halo for Journals dashboard

Halo. Market-leading data-auditing technology that scans and visualises information.

Halo’s key benefits:

With Halo, all transactions can be interrogated. This increases the quality of testing and helps us better assess risk and focus on the things that really matter.

Halo is designed to work on any information from any system. This not only makes Halo accessible to all of our clients, it also drives our ability to benchmark and provide insight.

Testing can now be performed off-site and throughout the year, supporting a smoother audit process.

Halo’s in-built algorithms, visualisations and benchmarking help our teams better understand our clients’ businesses and provide meaningful insights.

1

2

3

4

Built-in testsOur IP is embedded into algorithms, built on our global knowledge and experience

A snapshot of your businessKey metrics deliver insight and enable comparison with others

Insight on usersMetrics provide a profile of users, highlighting unusual activity


Halo for Journals. Helps identify higher risk transactions and process inefficiencies.

Journals

Test: All data

Test variables

FSLI | Account code and name | Creator ID | Month | Period | Source | Day | Time

Value | Volume

Company code

Selection: All

Manage filters Clear all

Manual fi lter Automated Manual

Current selections

Common rate

Local

SatThu

Fri

Wed

Mon

Sun

Tue

Company ABC 2015.01.01 – 2015.12.31 Currency: Common rate

Selection: GBP

Distinct journals Journal lines Total debits Total credits Total net PL136 457 25,080,444 -25,099,573 -3,539,678

Journals

Test: Unusual amounts

Test variables

Enter amounts to search separated by pipe ( | )

Amount greater than or equal to

0

1,400

Journals

1,200

1,000

800

600

400

200

Distinct journals Journal lines Total debits Total credits Total net PL66 (excl. 131) 22,873 (excl. 74,062) 5,696,616 (excl. 4,897,088) -5,696,616 (excl. -4,897,088) 10,774 (excl. 711,836)

Accou

nts...

Accou

nts...

Cost o

f sa..

.

Gross i

nv...

Interc

omp..

.

Other a

cc...

Returne

d ...

Prepaid

e...

Sales t

ax...


Net value | Gross value

Cash a

nd ...

Deferre

d i...

Gross s

al...

Operat

ing...

Suppo

rt tr...

1,600

Value (000s)

Company ABC 2015.01.01 – 2015.12.31

50

40

30

20

35

45

25

15

10

5

0

Company code

Selection: 3 of 10

Currency: Local

Selection: GBP



Current selections

100

1,000

Common rate

Local

JournalsLocal amount debitLocal amount credit

CreditDebit

Intercompan... Cash and ca... Accounts re... Gross invent... Intercompan... Cost of sales... Operating e...

Distinct journals Journal lines Total debits Total credits Total net PL100 338 25,080,310 -25,099,428 -3,539,736

Journals

Test: Unexpected account combinations

Test variables

Inclusive Exclusive Key account debit Key account credit

Key account minimum amount:

FSLI GL account

0

Open FSLI selector



Current selections

Key FSLI Cash and cash equivalentsOffset FSLI Insurance receivables


Gross value | Volume

Gross invent... Intercompan... Cash and ca... Accounts re... Gross sales... Intercompan... Accounts pa...

Company code

Selection: All

Common rate

Local


Selection: GBP

Company ABC 2015.01.01 – 2015.12.31



Current selections

Creator ID list Reece

Distinct journals Journal lines Total debits Total credits Total net PL65 542 52,434.00 -52,434.00 20,643.31

FSLI | Account code and name | Creator ID | Month | Period | Source

Net value | Gross value

Company ABC 2015.01.01 – 2015.12.31 Company code

Selection: All


Selection: GBP

Common rate

Local

0

14000

12000

10000

8000

6000

4000

2000

16000 14

12

10

8

6

4

2

0Ja

nFeb Mar Apr

May Jun Ju

lAug Sep Oct

Nov

JournalsValue

JournalsValue (000s)

Journals

Test: Unexpected users

Test variables

Find selected Find unselected

Creator ID list

Wall Reece Wilkinson Khoury Jones Abramov Robinson Sharma Doyle Patel Aziz Dixon Patel Kapoor Amari Dernov Lau Malik Taylor Jackson Miller Hamid

Are people wasting time posting entries twice, or

reversing them?

Is someone outside of the finance department posting journals?Are journals being

posted when you wouldn’t expect them to be? Are there unexpected journals

posted to key accounts?


We have built a number of Halo applications for different industries and risks. Here are a few examples.

Segregation of duties | Customers | Sales and distribution (details) | Customer master data | Sales orders | Invoice documents

39,289,363

5,949

39,230,978

39,246,972

0

0

30,000

Invoice documents

Outline agreements

Sales orders

Deliveries

Debit memo request

With ref. to other docuements

External

W/o. reference

Cancelled invoice documents

771

26

5,949

7

100 100%

100

0

0

1,390

39,230,978 100%

24,388,770

0

0

744

744

0

0

1

100

1

24,394,407

30,000

62%

100%0 0

0%0%

0

0 0

0%0%

0

0 0

0%0%

0

0 0

0%0%

0

39,253,414 744

96%100%

100

30,000 1

0%0%

1

5,949 26

3%0%

26

Company ABC to 01.01.2015 – 31.12.2015Halo for SAP

DashboardKPI Dashboard

Postings in fi scal year

Analysis

Analysis sell

Process audit

Manual price change

Reconciliation ERP SD/FI

Contra accounts to revenue accounts

Settlements receivable

Cut off revenues

Balance sheet oriented account

Month | Period | Supplier

Overall Remaining Selected Immaterial

Total population count Total population amount (Net) Total population amount (Abs.)44,112 103,598,194.64 103,598,194.64

Company ABC 01.07.2014 – 30.06.2015 Company code

Selection: All

FSLI

Selection: All

Mid Tier: Purchase to Pay

Test: ToD selector

Test variables Clear all

Purchases Open POs Accounts payable Post-YE invoices Payments Credit notes

0

>= 0 < 100

>= 1,600 < 1,700

>= 1,000 < 1,100

>= 1,500 < 1,600

>= 900 < 1000

>= 1,400 < 1,500

>= 800 < 900

>= 1,300 < 1,400

>= 700 < 800

>= 400 < 500

>= 1,200 < 1,300

>= 600 < 700

>= 300 < 400

>= 1,100 < 1,200

>= 500 < 600

>= 200 < 300

>= 100 < 100

AXA (000s)

Jul ‘1

4

Aug ‘1

4

Sep ‘1

4

Oct ‘14

Nov ‘1

4

Dec ‘1

4

Jan ‘

15

Mar ‘15

Feb ‘1

5

Apr ‘15

May ‘1

5

Jun ‘

15

Targeted Non-statistical

Desired level of evidence

Low Moderate High

Performance materiality


Current selections

High value

Risk

Unpredictable procedures

>PM

High value 0 0 0.0%

Risk 0 0 0.0%

Unpredictable 0 0 0.0% procedures

Total 0 0 0.0%

Remaining 44,112 103,598.195 100.0% population

No.items Abs.amount %

T4 V7 Final 01/08/2014 – 31/07/2015, CP Jul 2015Performance Analyser

DashboardPeriod

Year to date Quarter Equivalent quarter

90,815 -6%Revenue

43% 0%Gross margin

8% 1%Operating margin

5% 1%PBT margin

Rev

GP

PBT

Summary | Working capital related analysis & liquidity

A AS SS SO OO ON NN ND DD DJ JJ JF FF FM MM MA AA AM MM MJ JJ JA AJ JJ J

PBTGross profi t

CurrentPrior

-6%

-5%

PBTRevenue

-5,602

-1,968

Revenue and PBT trend Gross profit and PBT trend

PBT bridgeKPIs

7%290

CPNet Fin Cost OtherGPPP Op Exp

Intercompany Inc.

One-off items Inc.

No. of portfolios No. of instances No. of securities Client value (base) 1 189 167 53,458,937

Country

CH DE DK Other SE US

In/Out Scope

Selection: All

Dashboard

Audit currency

Selection: USD

Current selections Clear

Company ABC 2015.01.01 – 2015.12.31Investments

Income statement | Balance sheet | Custom reporting

Flux analysis | Common size | Component analysis | Expectation | Final

Composition of income statement for 2015 YTD by FSLI in £(000’s) Composition of income statement for 2014 YTD by FSLI in £(000’s)

T4 V7 Final 01.08.2015 – 31.07.2015, CP Jul 2015

Current selections

Performance Analyser

Financial statements

Variable selection Clear all

Period

Year to date Quarter Equivalent quarter

Analyse by

FSLI Company

Comparison

Actual Budget

Exclusion

One-off items Intercompany

Halo Performance AnalyserAnalyses key indicators and drivers of business performance to assess risk and identify trends, insights and outliers

Halo for InvestmentsOur investment valuation auditing tool analyses a client’s investment portfolios, from risk assessment through to substantive testing, using higher quality, more extensive data sources

Halo for Mid-tierOur data auditing tool for companies using smaller ERP systems and includes key reporting insights, audit tests and supports risk assessment

Halo for ERPOur end-to-end solution includes data extraction algorithms to automate audit testing and risk assessment


Connect is our collaborative workflow tool, providing fast, efficient and secure information sharing at every stage of the audit. It monitors the status of information flows on a real time basis. It is available on smartphones, tabletsand PCs, allowing both you and us to check progress on the go — any time, anywhere.


90

75

60

45

30

15

Company plc

Dashboard Requests My Page Team Contacts

View by Project Company plc 2016

Total

PwC

Client

Me

July 2016

Month

Week

Week

Week

Week

WE

7

14

21

28

Weekly status meeting with Company plc10:00 AM to 11:00 AM




Please provide the trial balance

7Jul

Jul

14

21Jul

28Jul

29Jul

120

105

0Requested from Client Submitted to PwC Returned to Client Accepted by PwC Total Overdue

76 76

0 06

30

3 20 0 0 0

21 21

0

103

76

5

0 0 0 0

ID Project Business Unit Category Request Name Status Notices

Company plc 20161

Company plc 20162

Company group 2016

Company group 2016

Group audit work

Group audit work

Consolidated Income Statement

Income Statement Analytic

Requested

Requested

All pending requests

24

SU

4

11

18

25

MO

5

12

19

26

TU

6

13

20

27

TH

8

1

15

22

29

SA

3

10

17

24

31

FR

2

9

16

23

30

Connect. Fast, efficient and secure information sharing at every stage.

Connect’s key benefits:

Access wherever you are. Connect is available worldwide, meaning PwC and clients can access and view information relevant to their location.

A secure web-based tool. With Connect, teams can request, access and exchange audit documents and deliverables, and review the status of information requests securely.

Consolidated dashboards. Connect consolidates audit-related issues, what is being done to resolve them and progress tracking in real time.

PwC experience. Connect is a gateway into a wealth of PwC experience, giving you access to thought leadership and industry news.

1

2

3

4

Key eventsNotification of up and coming events and deadlines are shared with all team members

Real time trackingThe personalised dashboard allows clients and audit teams to track status at an overall engagement and individual level


We are constantly investing in technology that takes the audit to the next level to meet the changing needs of our clients. We are exploring how AI can deliver even greater levels of reliability, efficiency and insight.


It is the fusion of outstanding people with market-leading technology and a robust approach that makes the PwC difference.


This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

© 2016 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

www.pwc.com

Technology in the PwC Audit Driving innovation · 2017-05-31 · At PwC, we are driving audit...

Documents

Transcript of Technology in the PwC Audit Driving innovation · 2017-05-31 · At PwC, we are driving audit...