A look at how companies may create collaboration between compliance operations and the internal audit.

1. Creating Collaboration between
Compliance and Internal Audit
David A. Frankel
Chief Marketing Officer
EDGAR Online
NOTICE: Proprietary and Confidential
This material is proprietary to EDGAR Online. It contains trade secrets and confidential
information which is solely the property of EDGAR Online. This material shall not be used,
reproduced, copied, disclosed, transmitted, in whole or in part, without the express
consent of EDGAR Online. The material shall also not be used to reverse engineer
EDGAR Online’s systems or processes.
© 2012 EDGAR Online, Inc. All rights reserved.

2. About EDGAR Online (NASDAQ:EDGR)
Leader in disclosure management, financial data and GRC
analytics solutions
• Our clients create, collect and analyze data using EDGR software tools and
content services
• We help companies:
• Comply with filing regulations
• Manage financial information
• Lower risk and lower compliance costs
• Gain control over and analyze information
• Implement more agile and effective GRC practices
EDGAR®Online 2

3. Ever Feel Like This?
EDGAR®Online 3

4. Effective Risk Management
Effective risk management = framework + process + standards
EDGAR®Online

5. Risk Processes & Language
Yet the majority lack common risk processes and language
Source: Deloitte
Risk Management Executive Survey
EDGAR®Online 5

6. What Finance Worries About
What keeps finance executives awake at night?
Risk spans all areas of the enterprise...
EDGAR®Online 6

7. Post 2008, Alignment is Critical
Audit, compliance and business operations MUST align.
Implications of losing control and visibility...
We are all still paying for the Lehman teeters. After The largest settlements
lack of foresight in mortgage $229bn in bail-outs for Bear paid by 11 pharmaceutical
and lending. The right Stearns, and Fannie Mae companies for bending the
control, structure and and Freddie Mac, the US rules total a staggering
analysis of data could have Treasury says it won’t part $6 billion.
prevented a full-blown crisis. with more taxpayer money.
Investors dump FS stocks.
EDGAR®Online 7

8. Traditional Role of Internal Audit
EDGAR®Online 8

9. Traditional Role of Compliance
Source: COSO & Grier Consulting
EDGAR®Online 9

10. Reworking the Model
Internal audit & compliance functions are evolving
Internal Audit Compliance
• Traditional role • Traditional role
• Assurance on risk evaluation and • Preservation of reputation
management processes • Compliance controls
• Evaluate risk processes, reporting and • Legal review and enforcement
management • Tactical
• Expanding role • Expanding role
• Skilled risk analysis
• Identify and evaluate risks
• Proactive risk management
• Coach on risk response
• Preventative compliance
• Champion & coordinate ERM • Champion ERM
• Develop risk-management strategy for • Consult on risk management
board approval strategy
Merging at same goal: Strategically minimize risk while achieving corporate objectives
EDGAR®Online 10

11. Risk Management Nirvana
Risk management nirvana – but how do you get there?
Source: Deloitte The Risk Intelligent Enterprise
EDGAR®Online 11

12. Effective GRC Today
Effective GRC today = No more silos
• Increased regulations have put risk management at the executive and board level
• Companies want centralized oversight and consistent risk management processes
• Multi-layer controls must work collaboratively
• Internal audit
• Compliance
• Business operations
• Big data is adding complexity
EDGAR®Online 12

13. What is “Big Data”?
“Big data” poses a threat to both audit and compliance.
EDGAR Online definition of “big data” – as it pertains to business
“volumes of structured and unstructured data
produced as a byproduct of operating a company”
Big Data is a GRC problem.
EDGAR®Online 13

14. Data: The Risk of Not Knowing
GRC is complicated by the increased volume and pace of data
EDGAR®Online 14

15. Understanding the End Goal
Aligning audit and compliance starts with shared data & insight
Leverage technology to:
• Transform how you collect and classify data – start with an end in mind
• A taxonomy will give you more agility and operational control in accessing information in
meaningful ways
• Standardize your data creation
• Example: XBRL used in SEC filings and can be extended companywide
• Implement standards-based analysis tools
• Bring context to data by presenting information in a way that is semantically pure and relevant to
the decision on hand
EDGAR®Online 15

16. Enabling Risk Management
Method = common framework
for viewing XBRL information
Common Technology =
Language shared content
= XBRL hub & analytics
Common Measurements =
benchmarking standards
EDGAR®Online 16

17. Aligning Risk Management
Benefits to aligning your risk management functions
• Promote “risk-aware” thinking and decision-making at all levels
• Lower GRC costs
• Gain faster insight into and control over risk information as it’s created
• Lower overall risk with increased visibility
• Pinpoint and address issues early
• Identify and evaluate business trends
• Better assess the impact of business decisions
• See potential new opportunities
• Become smarter and more agile
EDGAR®Online 17

18. Thank You
www.edgr.com
Twitter: @EDGAR_online
David A. Frankel
dfrankel@edgar-online.com
Twitter: @DavidAFrankel
EDGAR®Online 18