The document discusses the application of analytics in controls testing, emphasizing its advantages over traditional sampling methods, particularly in enhancing efficiency and effectiveness in audit processes. It outlines learning objectives for a webinar led by Ken Petersen, aimed at helping auditors identify suitable controls for analytics and implement necessary changes. The text also includes details about earning CPE credits for attending the webinar, along with guidelines and disclaimers regarding its content.

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How analytics should be used
in controls testing instead of
sampling
Ken Petersen
April 2020
RSA Archer
About Jim Kaplan, CIA, CFE
 President and Founder of AuditNet®,
the global resource for auditors
(available on iOS, Android and
Windows devices)
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Internet Resources” 2nd Edition
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About AuditNet® LLC
• AuditNet®, the global resource for auditors, serves the global audit
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Introductions
HOUSEKEEPING
This webinar and its material are the property of AuditNet® and its Webinar partners. Unauthorized
usage or recording of this webinar or any of its material is strictly forbidden.
 If you logged in with another individual’s confirmation email you will not receive CPE as the
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webinar. Downloading or otherwise duplicating the webinar recording is expressly prohibited.
 If you meet the criteria for earning CPE you will receive a link via email to download your
certificate. The official email for CPE will be issued via NoReply@gensend.io and it is important to
white list this address. It is from this email that your CPE credit will be sent. There may be a
processing fee to have your CPE credit regenerated if you did not receive the first mailing.
 Submit questions via the chat box on your screen and we will answer them either during or at
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IMPORTANT INFORMATION
REGARDING CPE!
 ATTENDEES - If you attend the entire Webinar and meet the criteria for CPE you will receive an
email with the link to download your CPE certificate. The official email for CPE will be issued via
NoReply@gensend.io and it is important to white list this address. It is from this email that your
CPE credit will be sent. There may be a processing fee to have your CPE credit regenerated after the
initial distribution.
 We cannot manually generate a CPE certificate as these are handled by our 3rd party provider. We
highly recommend that you work with your IT department to identify and correct any email delivery
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system or a firewall that will redirect or not allow delivery of this email from Gensend.io
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registration will be cancelled and you will not be able to attend the Webinar.
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Ken Petersen
• Currently Product Manager of TeamMate
Analytics
• 25+ years developing and implementing
systems
• In the Governance, Risk & Compliance
space since 2002
• BSBA from Ohio State, MBA from University
of Dayton, PMP certified
• ken.petersen@wolterskluwer.com
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Learning Objectives
In this Webinar, attendees will:
 Understand the advantages of analytics vs sampling
 Learn how to identify controls where analytics can be applied
 See real life examples of controls and their associated analytics
 Learn how to effect a change
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POLLING QUESTION 1
Why Perform Analytics?
1) The Standards say so
2) COVID-19 - You do not have to be on site, in person, to do analytics
On a Gartner Internal Audit webinar in March 2020 with over 1000
CAE’s, the topic was remote work as an internal auditor – what’s
working and what’s not working.
A huge percentage of attendees (58%) stated that a lack of a data
analytics program means they cannot work right now – they are too
dependent on being present in the office.
3) Finding money
4) Increased assurance and reduced risk
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Analytics Advantages
 Sampling contains risks
 Sample is not representative of the population as a whole
 Efficiency
 The risk of incorrect acceptance is the risk that the sample supports the conclusion that the
recorded account balance is not materially misstated when it is materially misstated.
 The risk of incorrect rejection is the risk that the sample supports the conclusion that the recorded
account balance is materially misstated when it is not materially misstated.
 Effectiveness
 The risk of assessing control risk too low is the risk that the assessed level of control risk based on
the sample is less than the true operating effectiveness of the control.
 The risk of assessing control risk too high is the risk that the assessed level of control risk based on
the sample is greater than the true operating effectiveness of the control.
 Most fraud cannot be identified with sampling, many controls are intended to,
among other things, prevent fraud
 Provides deeper insight into the operations of the organization
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Demonstration
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Controls conducive to analytics
 Look for the word “Sample” in the testing procedure
 Your organization may use other key words, “Data”, “Transactions”
 Won’t apply to data that is not electronic
 May not be appropriate for reviewing documentation
 May not be appropriate for data that are not transactions, e.g. monthly
balance sheets
 May not apply for the entire scope of the control
 Level 2
 Can document review be converted to data analysis?
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POLLING QUESTION 2
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Demonstration
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How do we change
 The individual must recognize a need for a change
 The desire to change needs to be stronger than the perceived and real
difficulty of changing
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Our auditors can’t do analytics
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 Requires database skills
 Requires programming skills
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Desiretochange
Difficulty of changing (perceived /real)
When change occurs
How do we change
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Change
No Change
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How do we change
 Change can have a chain reaction
 Change can be temporary or lasting
 Other factors and people can influence our desire to change and difficulty
of change
 The desire to change and the difficulty of change can change over time
 Change can have side effects, good and bad
 Our documentation improved because of analytics
 Employee satisfaction increased when they started doing analytics
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POLLING QUESTION 3
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www.TeamMateSolutions.com
ken.petersen@wolterskluwer.com
Ken Petersen
April 2020
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