Turning internal audit into the data analytics epicenter for your organization
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Transcript of Turning internal audit into the data analytics epicenter for your organization
TURNING INTERNAL AUDIT INTO THE DATA ANALYTICS EPICENTER FOR YOUR ORGANIZATION
Presenter: Heath Rude
Internal Audit Strategic Plan
•Satisfaction survey score •Audit requests•Outreach activities•Committee/task force•PwC reliance on IA
PARTNERINGOBJECTIVES MEASURES
•Provide the best customer service possible•Become a strategic business partner & trusted advisor
•Cost savings•Use of technology to enhance the audits•Best practices & process improvements identified
PIONEERINGOBJECTIVES MEASURES
•Add value & improve company operations•Embrace the use of new technology•Stimulate positive change
•Satisfaction survey•Training hours/auditor•Staff certifications•Industry experience•Audit experience•Audit staff turnover
PEOPLEOBJECTIVES MEASURES
•Develop skilled & motivated individuals into future company leaders•Be the employer of choice in the industry
PROCESSES
•Audit performance evaluation score•Audit plan completion %•Budget vs. actual costs•Report turnaround
OBJECTIVES MEASURES•Provide independent, objective assurance and consulting services in a systematic, disciplined approach
INTERNAL AUDITSTRATEGY
CORPORATESTRATEGY
• Leadership
• Professionalism
• Passion
• Happiness
• Vision
• Innovation
• Change
• Proactivity
• Independence & Objectivity
• Integrity
• Efficiency & Effectiveness
•Professional Skepticism
• Trust
• Teamwork
• Unity
• Synergy
ADVISORY
ASSURANCE
Values
Values
Valu
esValues
Focus on the BONE!Improve your organization through data analytics!
■ Take the Lead■ Tactics■ Obstacles■ Real Examples
Become Sought-After
.
The Case for Internal Audit (IA) Taking The Lead
Assurance
Diversity
Exposure
Data Analytics
Assurance Skillset Advisory
• Process Re-Engineering• Facilitators• Data Analytics
“That is not the role of IA.”
Internal auditing is an independent appraisal activity established
within an organization as a service to the organization.-IIA Definition of IA in 1978
Internal auditing is an independent, objective assurance and
consulting activity designed to add value and improve an
organization’s operations.- IIA Definition of IA from 1999 to today
Internal Audit credibility and value are enhanced when auditors are
proactive and their evaluations offer new insights and consider
future impact.- 2016 Proposed Addition, Standard 2100
Aligns with the strategies, objectives, and risks of the organization.
Demonstrates quality and continuous improvement.
Communicates effectively.
Is insightful, proactive, and future-focused.
Promotes organizational improvement.
Advisory services is an essential function of IA.
Tactic 1: Integration
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1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
New York State Violent Crime Rate per 100,000 Population
Source: FBI, Uniform Crime Reports
For Daily Fantasy-Sports Operators, the Curse of too much Skill
In the first half of the 2015 MLB season, 91% of daily fantasy sports
player profits were won by just 1.3% of players-Article by Ed Miller and Dan Singer, Sports Business Daily
How Companies Learn Your Secrets
My daughter got this in the mail!” he said. “She’s still in high school,
and you’re sending her coupons for baby clothes and cribs? Are you
trying to encourage her to get pregnant?”-Article by Charles Duhigg, New York Times
Tactic 2: Timing is Everything
RED FLAG RULESAre customers who they say they are?
■ Huge data set in multiple tables■ Defined rules of applicability■ The system handles it■ Company expert
Customer RatesWere customers accurately billed?
■ Several regulated tariffs■ Monthly weather adjustor■ Team to program and test■ Over 100 pages of scripting
“They should not have access to that.”
IA needs access to data to do their job.
Tactic 3: Market Yourself
Everything you wanted to know about audit, but were too afraid to ask!
Planning
Fieldwork
Reporting
Follow Up
The Audit Process
2nd Line: Monitoring
1st Line: Performing
3rd Line: Auditing
Risks
The Three Lines of Defense
Revenue ProtectionHas someone stolen gas?
■ Three lines of defense■ Validate reports or triggers■ Improve the process
Rate Change ReportWere changes properly entered into the system?
■ Many types of changes■ Over 2,200 pages■ 100% comparison■ Temporary fix
Purchasing Card CommitteeWhat card is best for our Company?
■ Spending habits■ Vendor contract■ Authorization levels and spending limits■ System configurations■ Dealing with outliers
Tactic 4: Win When You Fail
Fuel PurchasesAre fuel purchases legit and within policy?
■ Good procedures■ Poor reports■ No enforcement■ Bad data
Tactic 5: Support Other Data Analytic Groups
“We cannot ask them for help because they must maintain their independence.”
IA can provide assistance while ensuring safeguards are in place while maintaining independence.
Pipe RecallWhat pipe needs to be replaced and when?
■ Trouble getting data■ System change■ Lay out assumptions■ Prioritized by operational unit
“We’re hesitant to ask for help from them because it may be used against us.”
IA is a trusted advisor and a valuable partner.
Remember the BONE!Improve your organization through data analytics!
Build your strategy:
■ Integration■ Timing is Everything■ Market Yourself■ Win When You Fail■ Support Other Data Analytic Groups
Become Sought-After
THANK YOUCONTACT ME AT [email protected]