The document outlines the services of AuditNet, a global resource for auditors, providing access to templates, webinars, and professional resources for the audit community. It discusses the significance of selecting effective Computer Assisted Audit Tools (CAATs) to enhance audit processes, emphasizing systematic selection and implementation strategies. Additionally, it highlights the importance of training, monitoring, and continuous improvement in data analytics within internal audit functions.

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Are You a Smart CAAT
or a Copy CAAT?
October 25, 2017
About Jim Kaplan, CIA, CFE
 President and Founder of AuditNet®,
the global resource for auditors (now
available on iOS, Android and
Windows 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
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About AuditNet® LLC
• AuditNet®, the global resource for auditors, serves the global audit
community as the primary resource for Web-based auditing content. As the first online
audit portal, AuditNet® has been at the forefront of websites dedicated to promoting the
use of audit technology.
• Available on the Web, iPad, iPhone, Windows and Android devices and
features:
• Over 2,700 Reusable Templates, Audit Programs, Questionnaires, and
Control Matrices
• Webinars focusing on fraud, data analytics, IT audit, and internal audit
with free CPE for subscribers and site license users.
• Audit guides, manuals, and books on audit basics and using audit
technology
• LinkedIn Networking Groups
• Monthly Newsletters with Expert Guest Columnists
• Surveys on timely topics for internal auditors
Introductions
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HOUSEKEEPING
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IMPORTANT INFORMATION
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Are You a Smart CAAT or a Copy
CAAT?
Computer Assisted Auditing Tools
Donald E Sparks, CIA, CISA, ARM
Don@SmartCAATTs.com
407-756-0375
Selecting the right data analysis CAAT (Computer Assisted Audit Tool)
may appear to be a huge undertaking; however, following a systematic
approach eases the burden. The right approach minimizes the risk of
selecting a product that might not fit into your organization, which
could impair your function as it sits underutilized or on the shelf.
While point and click visual style tools are settling into the market,
many auditors rely on the legacy step-by-step software tools such as
ACL, IDEA, Excel and other “add-on” tools.
Many chief auditors pursue opportunities to increase the frequency
and intensity of interactions with management and realize nothing
gets attention faster than finding previously undetected anomalies in
company data. Finding the right issues quickly and timely improves
the value of audit and can assist audit in winning more work.
Marketing

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Data Analytics Defined
Data Analytics (DA) is the science of examining
raw data. The purpose of examining raw data is
to determine if the data contains information.
The information may be an indicator of a good
trend or a bad trend.
If you are pulling data out of a corporate data
warehouse (store or lake) beware that the data
may have been changed by the data
administrator.
What Does a CAATT Look Like?

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Successful data analytics integration
Tips
• Start with a high-priority, high-return project
• Focus on efficiency and effectiveness
• Communicate
• Be brief; be thorough; be gone!
• Exercise patience
• Use the software provider
POLLING QUESTION #1

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Pit Falls
• Avoid Career Ending “Shelf-Ware”
• Select the tool that best meets your strategy
• Data Governance Policy Will Lead the Way
• Be Sure Data Management Is On Your Team
• Do You Need A “Champion”?
• CAAT’s are for only the IT audit staff
• Build and Follow Your Own Roadmap!
Barriers
Leaders do not like “Shelf-ware”

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Systematic Selection &
Implementation – Work Plan
Do You Need
a Roadmap?
Common Analytic Strategic Goals
• Improve Audit Coverage, Efficiency and Effectiveness
• Intensify testing, targeted sampling and continuous
auditing
• Supply management with quantifiable issues
• Improve visibility of risk indicators
• Deliver on heightened expectations
• Improve Working Paper Documentation
• Improved Return on Investment (ROI)
• Improved early fraud indicators
* SOURCE: IIA Pulse and Protiviti

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POLLING QUESTION #2
1. Needs Analysis – Data Analysis as
an Enabler
Many CAE’s need to increase the frequency and
intensity of interactions with management and
realize nothing gets management’s attention faster
than finding previously undetected anomalies in
company data. Finding the right issues quickly and
timely improves the value of audit and can lead to
audit consulting assignments. While there are
consultants that help auditing functions to evaluate
the availability, applicability and performance of
commercially available data analysis software many
audit leaders realize the importance of this decision
and directly oversee this analysis.

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Step 1 Key Tasks
• Inventory staff skills and technology tools
• Improve your Data Analysis IQ
• Improve Your Knowledge of Information
Policies
Step 1 Key Tasks (cont)
• Involve Decision Makers – Understand the
approval process
• Integrate Business Knowledge into your
Strategic Planning Model

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Needs Analysis
At the conclusion of this step, the chief needs to
articulate a priority level and an expected install
date. The new internal auditing standard
requires the CAE to include discussions on the
impact of resource limitations with senior
management and the board.
POLLING QUESTION #3

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2. Financial Feasibility – What can
you afford
As the process of selecting data analysis software
progresses, you will need to keep track of what
everything is going to cost. Having a budget and a
time line readily available can maintain perspective
and can keep the project costs reasonable. The
budget should not dictate which software is
selected but it may impact the rate of distribution
i.e., moderate the pace of the roll-out across your
staff if finances are tight. Avoid the temptation to
“silo” the data analysis routines with just one
individual or the IT audit staff.
Step 2 Key Tasks
• Who’s Budget?
• Understand the Different licensing Provisions Available (Can save
money)
– Concurrent use license – One user, many machines installed. The
software can freely be installed on everyone’s machine.
– Per seat license (electric licensing) – One user, one seat. If the
software needs to be moved to another machine, it has to be
uninstalled from the old machine and installed on the new one.
– Leased Software – Not as common as it was in the mainframe days, but
some software is actually leased with the program “expiring” at the
anniversary. The software will not work until it is renewed.
– SAAS – soft.ware as a service cloud based support is coming

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Budget Considerations
• Basically, the internal audit function is looking for
a turn key solution. It is wise to include in the
budget all of the components to get the function
started in the right direction quickly:
– Software Maintenance and Upgrades
– Consulting work for data access or custom analysis
– Conversion of scripts from prior tools uses
– Help Desk Support
– Training and Workbooks
– Ancillary Programs Ready to Run
POLLING QUESTION #4

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3. Work with Providers – Start with
the right company
You will not be able to anticipate every obstacle
that your internal auditing function may encounter
and will need support. Many providers offer easy
getting started routines and programs, training at
varies locations, call in and email help-lines, and
contract consulting services. Therefore, some
consideration about the provider and the resources
available is important. You need to perform your
own due diligence as many providers exist with
varying degrees of capability:
Step 3 Key Tasks
• Market
• Years in Business
• Customers
• Global Presence
• Client Specialists

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4. Technical Feasibility – Narrow the
field
This is where the rubber meets the road. Do not
be tempted to skip this phase and just copy
what another organization is doing or using.
Just because it works well in their organization is
not a good reason to believe that it work just as
well in other organizations. Besides, they may
not have conducted their own evaluation but
relied on someone else’s recommendation.
Step 4 Key Tasks
• Obtain evaluation copies of the final three
candidates
• Install the software
• Document any problems encountered
• Documentation of Tests Completed
• Determine the Functions You Need

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POLLING QUESTION #5
5. Selection & Purchase– The best
solution
The contenders should be obvious by now so this step
should be the easy part. While it may have started with
the staff each using different tools, the selection process
has compiled enough knowledge about the choices to
select the one provider. You are ready to make the
decision.
During the selection phase, the software package that
best meets the needs of the internal audit function is
selected. Some organizations use a scoring system.

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Step 5 Key Tasks
• Don’t Go It Alone, Use Client Specialists
• Consider a hybrid solution
• Demonstrate You Stand Behind the Selection
• Purchase and Delivery
The formula is very simple: Vendor
Support + Synch with Strategic Objectives +
Functions/Features + Price = the winning solution.
POLLING QUESTION #6

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6. Implementation & Conversion –
Startup & Acceptance
The audit staff should confirm that what was purchased was delivered.
While this is usually a shrink wrap software, any other provisions of
the purchase should be confirmed as well such as books and training
classes. Repeating some of the earlier data analysis tests should also
be completed to provide the necessary precautions. Differences if any
should be reconciled and the appropriate sign-off for acceptance
should be internally provided.
The maintenance of the original CD’s will need to be established.
Some discussions with the IT staff may also be necessary to agree on
how future updates of the software will need to be tested and
accepted.
At this time, the plans previously established can start to roll.
Step 6 Key Tasks
• Follow the Roll-Out Plan – Conversion to
Production Use
• Follow the Training Plan
• Finalize the first audits where the solution
will be used
• Start a Library For Your Audit Staff

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7. Monitor & Improve – Reach For the
Next Level
In meetings with audit leaders a common
discussion point is how are we doing with the
use of data analysis software. The common
response of almost 100% is we are on the right
path but we should be doing more. This is a
very realistic viewpoint. The fact of the matter
is nearly every audit function in the world could
make that statement and be valid. So what can
we do to remove that stigma?
Step 7 Key Tasks
• Strive for 100% Deployment
• Maintain Technical Proficiency
• Stay in contact with the Client Specialist
• Use the Help Desk Support
• Look for New Opportunities to Expand Usage
• Keep software license up to date

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POLLING QUESTION #7
Quick Start Areas
• This is a list of good areas to start “Looking”
for anomalies in your data.

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Questions?
• Any Questions?
Don’t be Shy!
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Thank You!
Page 43
Jim Kaplan
AuditNet® LLC
1-800-385-1625
Email:info@auditnet.org
www.auditnet.org
Donald E Sparks
SmartCAATTs, LLC
don@smartcaatts.com
1-407-756-0375