How businesses can cut costs, improve operations, and reduce risk by adopting continuous audit and internal controls. What steps to take immediately and what to look for in an automation solution.

1. BRAINWAVE GRC
How Machine Learning makes continuous audit
and control possible

2. 2
Continuous Audit combined continuous evaluation of risks and controls on
IT systems. Continuous audit allows the internal auditor to communicate his analysis of the
object under consideration far faster than in the traditional retrospective approach.
Continuous Control process executed by management that enables
them to verify that controls are functioning effectively (MPA 2320-4 : Continuous assurance).
GTAG3, Institute of Internal Auditors
Continuous Audit & Control?
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3. Rapid adaptation to evolution of the enterprise:
More interactions with partners and outside providers
Evolution of systems, consolidation, cloud adoption
More sharing of data
Evolution of work: employees, consultants, outsourced operations
Reduce the impact of risk
Efficiency (Automation)
3
Why put in place continuous audit and controls?
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Proactive vs Reactive
Add value to Line of Business

4. You?
 Data silos
 Data volume to manage
 Complexity of controls
 Identify best solutions
 Financial and operational support from IT
and Line of Business
What are the hurdles?
4
Hurdles to deploying continuous audit and controls –
Technology
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 Computing power
 Progress of analytics
 Reliability and traceability
 Productivity (automation)
 Availability
Capabilities of technology

5. 5
 The following is based on real deployment cases with clients
 Details have been anonymized
What approach to adopt?
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Step 1 Step 2 Step 3 Step 4 Step 5
Exhaustive controls
on existing
perimeter
Add new controls
and extend
perimeter
Implement more
sophisticated
controls
Controls on
business processes
Behavioral analytics

6. 6
Internal Audit– Preparation
 I take a sample
 Get results
 Remediate
External Audit – Big day
 New sample
 Unpleasant surprise !
 In-depth control (SoX), select more data and ask detailed
questions of IT, internal audit…
Motivation 1
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1
Reduce
surprises !

7. 7
1
Calendar
 Audit launched in February, results in August, corrections in
September
 In between, no visibility
Organization and risks change rapidly
 Reorganization / Acquisition / Sale
 New systems, partners
 New risks, new regulations
Motivation 2
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Be more
proactive

8. 8
1  I manage valuable data for my clients
 Very competitive and sensitive sector
 New client > new applications > new controls
 Explosive growth in cost of implementing a new control
 This is unsustainable, I do not want to be a permanent roadblock to
business!
Motivation 3
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Enable
business

9. 9
Step 1 : Exhaustive controls on existing perimeter
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Define audit frequency
Automate collection process
Resume data extracts
Sample -> Comprehensive controls
1 2 3 4 5 1. Exhaustive controls on existing perimeter

10. Controls Dashboard
10
1 2 3 4 5 1. Exhaustive controls on existing perimeter

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No more surprises : I have control over everyone
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1 2 3 4 5 1. Exhaustive controls on existing perimeter

12. 12
I have the answers to questions from my auditor
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1 2 3 4 5 1. Exhaustive controls on existing perimeter

13. 13
Complete view of access to applications
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Individuals
and entities
Applications & permissions
1 2 3 4 5 1. Exhaustive controls on existing perimeter

14. 14
Step 2 : Add new controls and extend the perimeter
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The right automation solutions allows the addition of new controls with minimal
effort & no coding
Agile construction of control and rule matrix
1 2 3 4 5 2. Add new controls and extend the perimeter

15. Add new controls
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1 2 3 4 5 2. Add new controls and extend the perimeter

16. 16
Visualization of data access
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Individuals
and entities
Shared folders and type of access
1 2 3 4 5 2. Add new controls and extend the perimeter

17. 17
Step 3 : Implement more sophisticated controls
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Sophisticated control: FRAUD
 SoD + multiple operational steps across several applications
 Based on a fraud scenario
 Object : Trader on mandatory vacation must not access trading platform
 Data : vacation/time-tracking application (HR), physical access control
system (badge swipe), trading platform
 Results : List of suspects sent to manager in charge of control for
investigation
1500 controls
450 applications
2 times/ week
1 2 3 4 5 3. Implement more sophisticated controls

18. 18
Residual access in real life, situation that must be
temporary
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1 2 3 4 5 3. Implement more sophisticated controls
Sophisticated controls : INTERNAL MOBILITY
 Manufacturing client
 Temporary exception on SoD matrix: internal transfer
 Track deviations with a custom tolerance threshhold(x%)
 Alert temporarily suppressed (x days)
1 million identities
65 million tested
permissions

19. 19
Pareto : identify priorities for remediation
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Resolving conflicts on these 6 SoD rules would
eliminate 80% of problems.
1 2 3 4 5 3. Implement more sophisticated controls

20. 20
Step 4 : Business process controls
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Add financial dimension to IT risks
Additional level of confort for internal & external auditors
SoD on complete business processes
1 2 3 4 5 4. Business process controls

21. 21© Brainwave GRC – Proprietary and Confidential Information – All Rights Reserved
End-to-end view of fraud risk in the « Purchase to Pay » process
Detect intra application fraudsDetect inter application frauds
Model segregation of duties conflicts
1 2 3 4 5 4. Business process controls

22. 22© Brainwave GRC – Proprietary and Confidential Information – All Rights Reserved
Allocation of potential fraud risks by business process Impact of proven fraud by business process
Valuation of fraud risks on business processes
1 2 3 4 5 4. Business process controls

23. 23
Details of dangerous transactions
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Why did an
ASSISTANT perform
these dangerous
transactions ?
1 2 3 4 5 4. Business process controls

24. 24
 Detect unknown risks
Step 5: Behavioral Analytics
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Individuals with abnormal behavior
Accessed files
abnormally high for an
IT consultant
1 2 3 4 5 5. Behavioral analytics

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Benefits
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Before
After
Internal Audit
Data collection &
processing
Analysis of results
Remediation
Before
After
Line of Business/application manager
Time to perform reviews
Time to monitor reviews
Before
After
IT
Data collection
Response to auditors
Corrections
Better relations between business, IT,
internal audit, & external audit
Gain in productivity across the
organisation
Increased value add

26. 26
Share !
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Internal Audit
IT Security
Operational Risk
Application owners
Line of Business
External Auditors
Value added by analytics across the organisationDeliver value
30 to 90 days of effort to productionSpeed
Autonomy to create controls and analyse resultsFlexibility / Agility
Share results and benefits with:
 More confidence and comfort
 More value across the organisation
 More operational and financial support

27. Contacts
Emmanuel Sol
C: +1 514 647 6574
emmanuel.sol@brainwavegrc.com
Eric In
D: +1 437 836 3621
C: +1 647 544 6000
eric.in@brainwavegrc.com
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Graeme Hein
C: +1 416 795 3858
graeme.hein@brainwavegrc.com