Using MS Excel In Your Next Audit - Top Basic & Intermediate Techniques


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Data analytics does not need to be difficult or time consuming to start and in this course, we will focus on the key learning blocks needed within Microsoft Excel to be an effective data analytic auditor or accountant.

As regulatory changes sweep the globe, auditors, risk management, and compliance professionals are using more sophisticated tools, and methods.

Using a live/video training library approach, we help companies of all sizes use audit and assurance software to improve business intelligence, increase efficiencies, identify fraud, test controls, and bottom line savings.

AuditNet and Cash Recovery Partners Webinar recording available at and (registration required) Recording free to view.
Sample Data Files for All Courses are available for $49

To purchase access to all sample data files, Excel macros and ACL scripts associated with the free training visit AuditSoftwareVideos.

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Using MS Excel In Your Next Audit - Top Basic & Intermediate Techniques

  1. 1. Using MS Excel In Your Next Audit - Top Basic & Intermediate Techniques (2 CPE Credits) April 24, 2014 AuditNet and AuditSoftware.Net Collaboration Brought to you by and AuditNet®, working together to provide  Practical audit software training  Resource links  Independent analysis  Tools to improve audit software usage Today focused on providing practical data analysis training Page 1
  2. 2. About Jim Kaplan, CIA, CFE  President and Founder of AuditNet®, the global resource for auditors (now available on Apple and Android devices)  Auditor, Web Site Guru,  Internet for Auditors Pioneer  Recipient of the IIA’s 2007 Bradford Cadmus Memorial Award.  Author of “The Auditor’s Guide to Internet Resources” 2nd Edition Page 2 About AuditNet® LLC • AuditNet®, the global resource for auditors, is available on the Web, iPad, iPhone and Android devices and features: • Over 2,000 Reusable Templates, Audit Programs, Questionnaires, and Control Matrices • Training without Travel Webinars focusing on fraud, audit software (ACL, IDEA, Excel), IT audit, and internal audit • Audit guides, manuals, and books on audit basics and using audit technology • LinkedIn Networking Groups • Monthly Newsletters with Expert Guest Columnists • Book Reviews • Surveys on timely topics for internal auditors Introductions Page 3
  3. 3. Webinar Housekeeping Page 4 This webinar and its material are the  property of  Cash Recovery Partners.  Unauthorized usage or recording of this  webinar or any of its material is strictly  forbidden. We are recording the webinar  and you will be provided with a link to that  recording as detailed below. Downloading or  otherwise duplicating the webinar recording  is expressly prohibited. Webinar recording link will be sent via email  within 5‐7 business days. NASBA rules require us to ask polling  questions during the Webinar and CPE  certificates will be sent via email to those  who answer ALL the polling questions The CPE certificates and link to the recording  will be sent to the email address you  registered with in GTW. We are not  responsible for delivery problems due to  spam filters, attachment restrictions or other  controls in place for your email client. Submit questions via the chat box on your  screen and we will answer them either  during or at the conclusion. After the Webinar is over you will have an  opportunity to provide feedback. Please  complete the feedback questionnaire to help  us continuously improve our Webinars If GTW stops working you may need to close  and restart. You can always dial in and listen  and follow along with the handout. Disclaimers 5 The views expressed by the presenters do not necessarily represent the  views, positions, or opinions of AuditNet® or the presenters’ respective  organizations. These materials, and the oral presentation accompanying them,  are for educational purposes only and do not constitute accounting or legal  advice or create an accountant‐client relationship.  While AuditNet® makes every effort to ensure information is accurate and  complete, AuditNet® makes no representations, guarantees, or warranties as  to the accuracy or completeness of the information provided via this  presentation. AuditNet® specifically disclaims all liability for any claims or  damages that may result from the information contained in this presentation,  including any websites maintained by third parties and linked to the AuditNet®  website Any mention of commercial products is for information only; it does not imply  recommendation or endorsement by AuditNet®
  4. 4. Richard B. Lanza, CPA, CFE, CGMA • Over two decades of ACL and Excel software usage • Has written and spoken on the use of audit data analytics for over 20 years. • Received the Outstanding Achievement in Business Award by the Association of Certified Fraud Examiners for developing the publication Proactively Detecting Fraud Using Computer Audit Reports as a research project for the IIA • Recently was a contributing author of: • Global Technology Audit Guide (GTAG #13) Fraud in an Automated World – Institute of Internal Auditors. • Data Analytics – A Practical Approach - research whitepaper for the Information System Accountability Control Association. • Cost Recovery – Turning Your Accounts Payable Department into a Profit Center – Wiley and Sons. Please see full bio at Learning Objectives  Use Excel as audit software, able to mimic practically all data analytic commands found normally in more expensive tools.  Request, extract, import data into Excel, and validate data prior to analysis.  Get started with and quickly maximize Pivot Tables, turning them into effective data mining tools able to unearth almost any audit finding.  Use different approaches to sampling with Excel and low-cost add-ins.  Create all types of graphs to pinpoint changes over time and/or other chart dimensions.  Turn a series of Excel functions into a macro so that data import and audit testing techniques can be automated. Page 7
  5. 5. Malpractice without Analytics? Page 8 How to Use Excel As An Audit Tool Free whitepaper on Excel: audit-software.pdf ActiveData for Excel Link – Discounted $199 software purchase link - Page 9
  6. 6. Types of Analytical Tests (Substantive Test) 1. Trend Analysis 2. Ratio Analysis 3. Reasonableness Tests 4. Regression Analysis “Analytical Procedures – Audit Guide”, AICPA, March 2012 Page 10 How To Use Excel As Audit Software – Free Whitepaper  Data Management Tests  Append / Merge  Calculated Fields  Cross Tabulate  Duplicates  Extract/Filter  Export  Gaps  Index / Sort  Join / Relate  Sample  Summarize  Analytical Tests  Analytical Tests  Horizontal Analysis  Vertical Analysis  Ratios  Trend Analysis  Performance Measures  Statistics  Stratifications  Aging  Benford’s Law  Regression  Monte Carlo Simulation Page 11
  7. 7. Quick Process to Running Data 1. Know your audit objectives 2. Align reports to the objectives 3. Use past reports to model /refine reports 4. Set data requirements based on reports 5. Obtain, validate, and normalize data 6. Edit scripts for data needs 7. Run reports and document results Page 12 Clear Data Request Accounts Payable Data Request.doc Page 13
  8. 8. Sample Data Validation – Accounts Payable Other Questions Validation analysis can be programmed into the data normalization script to answer the below questions: Statistical analysis should also be completed as part of the validation analysis Agreement to batch totals and sample data are critical Page 14 Polling Question #1 What comes first in the data extraction process?  Request data  Set objectives for the audit  Set report objectives  Validate data Page 15
  9. 9. Pivot Tables and Charts > The Basics Explained Page 16 Getting Started: Pivot to New Sheet Page 17
  10. 10. Getting Around The Pivot-  Right click on the amount fields (data part) to see field list and edit various Pivot Table options  Select from the Top Ribbon Menu the Options and Design menus for Pivot Tables (Excel creates them when a Pivot Table is created) – best and easiest way to make changes Page 18 Change Number Format and Type Page 19
  11. 11. Graphing the Data With your mouse pointer anywhere in the Pivot, select the Pivot Chart button Whatever is in the Pivot will be added to the Chart Page 20 Grouping Date Ranges Page 21
  12. 12. Polling Question #2 Where do you change your value formats in a PivotTable?  Grouping  Value Field Settings  Pivot Chart  Active Field Format Page 22 Stratifying Data and Dynamically Grabbing All Data in a Pivot Table Page 23
  13. 13. Stratify Your Data Page 24 =IF(B4>1000,“3. Over $1000",IF(B4>100,“2. Over $100 to $1,000",IF(B4<=100,“1. Up to $100"))) This will create three strata: 1. Up to $100 2. Over $100 to $1,000 3. Over $1,000 Start from highest to lowest – Excel picks the first matching item Capturing All Data Named Range Formula If PivotData is where you have your data: =OFFSET(PivotData!$A$1,0,0,COUNTA(Piv otData!$A:$A),COUNTA(PivotData!$1:$1)) …will ensure the entire sheet is mapped for pivoting and graphing. Page 25
  14. 14. Polling Question #3 What function is Used to Obtain All Parts of a PivotTable?  Min  Over  More  Offset Page 26 Specific Accounts Payable Tests Page 27
  15. 15. Query Viewpoints Page 28 Specific Accounts Payable Tests (What) Summarize activity on the amount field (absolute value of debit or credit) to identify the top occurring amounts. Then summarize activity by vendor and the amount identified for the top 25 appearing. (What) Extract payables that equate to round multiples of 10,000, 100,000, and 1,000,000. (When) Extract transactions posted on weekends and holidays. (When) Summarize activity by day, month, and year. (Who) Summarize activity by user and month Page 29
  16. 16. Other Useful Graphing Techniques The Scatter Page 30 31 Scatter Graph Page 31
  17. 17. Scatter Graph Explanation 1 – high dollar change and low count (outliers) 2 – charges that make sense 3 – changes that don’t make sense 4 – inefficiency that is developing Page 32 Polling Question #4 What function is used to determine if a cell is a round number?  OFFSET  MOD  MID  ROUND Page 33
  18. 18. Sampling in Excel and ActiveData for Excel Page 34 Steps in Sampling Page 35 1. Set Audit Procedure Objective 2. Define the Attribute for Testing  Yes / No  Value over / under statement 3. Set the Population 4. Select a Sampling Method 5. Calculate Sample Size 6. Audit the Sample 7. Evaluate the Sample
  19. 19. Types of Sampling Page 36 Attribute (Random, Fixed Interval, & Cell) Monetary Unit / PPS Stratified  By amount  By transactional score Software Input Types Page 37 Term Record / Attribute MUS / PPS Population Number of Records Dollars in a Field Confidence Confidence % Inverse is beta risk or risk of incorrect acceptance Confidence % Inverse is beta risk or risk of incorrect acceptance Upper Error Limit Upper Error Rate % Tolerable Deviation Rate Materiality / Tolerable Misstatement Expected Total Errors Error Rate % Error Value Interval Record Interval Dollar Interval Tolerable Errors # of Errors Maximum Tainting %
  20. 20. Excel Macros Demonstration Preparing Excel for Macro Development Page 38 Key Macro Uses Formatting Data Adding Totals and Formulas to Columns Importing Data Files Adding Tickmarks Moving Data Around ….Anything You Repetitively Do As an Auditor Page 39
  21. 21. Polling Question #5 What keys can you select to quickly open the Visual Basic Editor:  Ctrl-X  Ctrl-Z  Ctrl-F9  Alt-F11 Page 40 Added Bonuses Files Used in the Class Using Excel as an Audit Software ActiveData for Excel Link – Discounted $199 software purchase link - Page 41
  22. 22. Questions? Any Questions? Don’t be Shy! Page 42 In the Queue Getting Started Using ACL in Your Next Audit (ACL Basic) – May 1 Using ACL Scripting in Your Next Audit (Basic/Intermediate Techniques) – May 15 Excel Pivot Tables and Graphing for Auditors – June 25 Building Simple Continuous Monitoring in ACL – July 2
  23. 23. Thank You! Jim Kaplan AuditNet® LLC 1-800-385-1625 Richard B. Lanza, CPA, CFE, CGMA Cash Recovery Partners, LLC Phone: 973-729-3944 Cell: 201-650-4150 Fax: 973-270-2428 Email: Page 44