Technology ahia 2012 jmk


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How Technology Continues to Revolutionize Auditing: The Latest Tools and Their Impact on the Profession presentation for the Association of Healthcare Internal Auditors in 2012

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Technology ahia 2012 jmk

  1. 1. 7/12/2013 1 HOW TECHNOLOGY CONTINUES TO REVOLUTIONIZE AUDITING: THE LATEST TOOLS AND THEIR IMPACT ON THE PROFESSION JIM KAPLAN CIA CFE PRESIDENT AND FOUNDER AUDITNET® AHIA 31st Annual Conference – August 26-29, 2012 – Philadelphia PA 1 Agenda  Introduction  Historical Timeline Internet and Auditors  Technology’s Impact on Audit  Innovation in Audit Research  Evolution of Professional Networking  Latest Technology Tools for Auditors  Trends and the Future of Audit Technology
  2. 2. 7/12/2013 2 Then and Now Auditors and Technology  Early Adopters  Innovators (into the new from Latin  Interested in new methods & techniques  Risk takers  Forward thinking  Gen X & Y  Laggards  Wait and see  Cautious  Hangs back  Last group to try or adopt a new product  Dislike change
  3. 3. 7/12/2013 3 Evolution of Web for Audit Computers, Auditors and CAATTs  The Evolution of CAATTs 80’s  Around  Through  With  EDP/IT Auditors  Mainframe  Audit Software 90’s  Data extraction and analysis  IT and non IT Auditors  Windows  The Millenium  Software for all phases (planning, fieldwork, GRC)  Cloud computing
  4. 4. 7/12/2013 4 Impact of Technology  Computers and networks provide most of the information needed for auditing  Auditors must use the computer as an auditing tool  Auditors must also use the computer for audit administration Impact of New Technology on the Profession  Professional Standards  16 Global Technology Audit Guides have been released since January 2009
  5. 5. 7/12/2013 5 New Technologies and their Impact  Mobile computing  The Cloud or Internet based services  SaaS (application based)  PaaS (end to end SDLC)  IaaS (servers, storage, network) Social Media  Social Media Defined  The good the bad and the ugly  What is the primary risk?
  6. 6. 7/12/2013 6 Technology as an Enabler There is a wide array of specialized tools to support and enhance the entire spectrum of internal audit processes … for the most part (auditors) are not taking advantage of them Not surprisingly, survey participants predict that technology will affect internal audit roles and responsibilities more than any other business trend. PwC 2010 Study on the State of the internal audit profession Audit Software
  7. 7. 7/12/2013 7 Categories of Audit Software Technology Automated Issues Tracking Electronic Work Papers Risk Assessment Continuous Controls Monitoring Anti Fraud Software GRC Audit Management Software Audit Resource Scheduling Data Analytics Data Analysis for Auditors Although internal auditors have been doing data analysis for more than 25 years, it has only recently started to become standard practice. By our nature, most accountants and auditors are inclined to stick with what has worked in the past, rather than reach outside our comfort zone for an alternative that could help us accomplish more. Do you reach outside your comfort zone?
  8. 8. 7/12/2013 8 Obstacles to Implementation  Lack of an audit methodology  Skill set gap  Department size  Cost implication  Complexity of the software  Resistance in training auditors  Failure of software to meet audit departments needs  Failure to plan for use Heard on the Street Technology Initiatives considered having the most impact (2012 AICPA Top Technology Issues) 1.Information security 2.Remote access 3.Control and use of mobile devices 4.Business process improvement with technology 5.Data retention policies and structure 6.Privacy policies and compliance 7.Staff and management training 8.Spreadsheet management 9.Overall data proliferation and control 10.Portals (vendor and client/customer)
  9. 9. 7/12/2013 9 New Tools for Auditors New Tools  Sept, 2008….  Any device, Any time, Any where was born  Users not interested in security, they want to trust, not to be trusted  Any unprotected device connected to both the Internet & and company LAN poses a security risk
  10. 10. 7/12/2013 10 Other Technology Tools for Auditors  Open Source Audit Software  Continuous Controls Monitoring  Regulatory Compliance  Business Intelligence Software Audit Apps for iPhones/iPads
  11. 11. 7/12/2013 11 Imagine the Possibilities  Access your computer from remote locations  Collaborate using tools from the road  Access audit programs, work papers and more from your mobile device  Join Webinars and Webcasts for training  Conduct or participate in virtual meetings with staff, clients etc. Trends and their Impact  Mobile devices and wireless computing  Smart devices and malware  Cloud sourcing and computing – security, governance and compliance  Social media platform for communications  Continuous risk and control assessment  Reporting to the Board using SOTA technology
  12. 12. 7/12/2013 12 Skill Set for Future Auditors  Multi-disciplinary less accountants more business oriented  Critical thinking skills  Strong communication skills  Audit Technology oriented The Impact of Technology Observations Not surprisingly, survey participants predict that technology will affect internal audit roles and responsibilities more than any other business trend. High-performing internal audit functions maximize the use of technology to enhance the efficiency, effectiveness, and quality of operations. PwC 2012 Study on the State of the internal audit profession
  13. 13. 7/12/2013 13 AuditNet® Survey - 2012 State of Technology Use by Auditors Profile of Over 1,500 Responses • 45% 5 or less auditors • Technology tools used – mostly data analytics and EWP • Technology tools least used – monitoring (continuous audit and fraud), GRC, risk compliance • Only 17% feel that their auditors are technology proficient • Technology training primarily OJT • 35% maintain an inventory of audit technology tools • More than half (54%) rated their department at the informal use level (ad hoc or none at all) for audit technology • Less than 4% rated their department at the highest maturity level AuditNet® 10 Point Action Plan for Integrating Technology in Audit 1. Conduct an inventory of audit technology tools 2. Provide training for all staff in use of audit technology 3. Measure staff technology KSA 4. Build a business case for audit technology 5. Work with IT and Senior Management on cost 6. Hire auditors with technology skills 7. Find a technology champion and influencer 8. Establish an audit technology assessment benchmark and update annually 9. Require the use of technology for all audit and administrative tasks 10. Develop a succession plan so that audit software does not become shelfware
  14. 14. 7/12/2013 14 AHIA Improvement Needs Top 5 27  Continuous Audit  IT Audit Performance  Data Analytics  Enterprise Risk Management  Clinical Processes Future Predictions  Standards will mandate use of technology tools for audit  New generation of auditors must have the KSA to utilize technology  If auditors and audit departments do not adapt to new technology they risk outsourcing  Social networking will evolve to professional networking  Tools will become more intuitive  Knowledge hubs for audit tool, techniques and resources will consolidate and merge
  15. 15. 7/12/2013 15 Audit Programs in the Queue AuditNet®  Auditor’s Guide to Cloud Computing - Security Considerations.xls  Cloud Matrix_Benefits & Risks.xls  AuditNet® Guide to Social Networking  AuditNet® Guide to Wireless Security  Business Continuity Planning – A Diagnostic Tool  Forensic Document Examination  Guidelines for Validation Testing  Data Analytics Enabled Audit Programs for Key Business Processes  AuditNet® is working to provide tools and resources to keep pace with new technology! Conclusion  I hope that I have provided you with some useful information that will stimulate your thought processes!  Any questions?
  16. 16. 7/12/2013 16 Contact Information Jim Kaplan CIA, CFE