Still using spreadsheets for audit analysis? This presentation reviews why auditors should STOP the practice. SLIDESHARE: www.slideshare.net/CaseWare_Analytics WEBSITE: www.casewareanalytics.com BLOG: www.casewareanalytics.com/blog TWITTER: www.twitter.com/CW_Analytic

1. REASONS YOU NEED TO STOP USING
SPREADSHEETS FOR AUDIT ANALYSIS
AUDIT SOLUTION

2. WHY WE LOVE SPREADSHEETS
• Constant use = familiarity
• Easy to share
• Database-like features
• Data import, analysis, and report generation functions

3. PROBLEMS WITH SPREADSHEETS
Definition: A program in which users enter numerical values
or data into rows and columns, and use these entries for
calculations, graphs, and statistical analysis.
Data values can easily be altered – even accidentally
VLOOKUP and other formulas break easily but not always
easily detected

4. SPREADSHEETS ARE RISKY
Despite familiarity, spreadsheets lack data integrity
Difficult to replicate analytics
Difficult to “debug”
Difficult for someone new to take ownership
I’mafraidIaccidentally copiedlast
yearsspreadsheet numbersintothis
yearsannualreport.
Soo….Are
theyclose?

5. DATABASES
A data management system that is able to handle larger data
volumes than spreadsheets and provide robust data exchange
Complicated User Interface
Complex scripting knowledge required
No point and click solutions available

6. CAAT
• Computer Aided Audit Tools
• Offers comprehensive approach compared to traditional
audit sampling methods
• Facilitates more granular analysis of data
• Delivers more definitive results because the entire
population of data can be tested

7. CAAT: BEST OF BOTH WORLDS AND MORE
ATTRIBUTE SPREADSHEETS DATABASES CAATS
Familiarity High Low Low
Ease of learning Medium High Medium
File size Small Large XLarge
Speed Slow Fast Fast
Data Integrity
Accidental or intentional
data changes
Imported data
more secure
Imported data
always secure
Routine audit analysis Build it yourself Build it yourself Pre-built
Audit trail Create manually Create manually Automatic
Pull in PDF reports Painful Painful Simple
Data matching None None Many

8. AUDIT ANALYTICS
CAATs
Timeliness
Secure
Read-Only
Data
Access
100% Data
Coverage
Pre-Built
Analytics
Automate
Processes

9. DATA ACQUISITION
CaseWare IDEA helps you
import and export data from
and into a multitude of
formats – including files
originating from mainframe
computers and accounting
software (ODBC Connection
to JDE) (SAP Import tool)IDEA

10. WORKING WITH IDEA
Pivot Tables
Reports
Charts
Exports
History
Project Overview
Automate
Import from
virtually any source
– from PDF to ERP
Extract • Sort • Search • Group
Calculated Fields • Stratify • Summarize
Age • Gaps • Duplicates • Sample
Statistics • Join • Append • Compare
1. Import Data 2. Perform Analysis 3. Review Results

11. PRE-BUILT ANALYTICS
• Aging
• Duplicate Detection
• Benford’s Law
• Summarization
• Stratification
• Gap Detection
• Advanced Statistical Methods
• Multiple Sampling Methods

12. PRE-BUILT ANALYTICS: AGING
Use the Age Band column as the column field in the
Pivot Table.
The oldest (i.e., first) date should be older than the
oldest record. For simplicity, use “1” (1/1/1900) as the
date. This will represent the “X days +” band.
• Complicated equations
• No data integrity
• User friendly interface
• Data integrity
• Enter a few values,
receive results

13. PRE-BUILT ANALYTICS: BENFORD’S LAW
Frequencies predicted by Benford’s Law for First
Digit, Second Digit, and First Three Digit tests.
• Not intuitive
• Can easily override values
• No drill down feature
• No custom graph
• User friendly
• Read-only access
• Drill down feature
• Custom graph

14. AUTOMATIC AUDIT TRAIL
IDEA automatically records all changes made to a file
(database) and maintains an audit trail of all operations
carried out, including the import and each audit test

15. CAATS IMPROVE AUDIT EFFICIENCY
Before Audit Analytics
- Painful data collection and prep
- Data corruption may not be
detected
- Analysis difficult to repeat
consistently
- Limited to sampling with large
data sets
- Manually documented
With Audit Analytics
✔ Easily collect & prepare data
✔ No risk of data corruption
✔ Easily repeat analysis consistently
✔ Easily review 100% of data
✔ Automatically self-document
Inefficient, Incomplete, Unreliable Automated, Extensive, Reliable

16. HOW TO DETERMINE RISK
Before Audit Analytics
Random/Stratified Sample
With Audit Analytics
Examine 100% of data
Risk missing key insights
Data quality issue
Unreliable results
✔ Quantify exact risk
✔ Quickly dig deeper into data if
merited
✔ No risk of data corruption

17. TEST FREQUENCY
Before Audit Analytics
1 to 3 times per year
With Audit Analytics
Unlimited (Monthly, Weekly, Daily)
Missed opportunities
Lack-luster reports
✔ Timely remediation
✔ Insights into strategic risks

18. WHERE CAATS HELP
Area Specifics
Revenue • Billing • Order to Cash
Expense
• Purchase to Pay
• Travel & Expense
• Vendor terms
• Purchasing cards
• Compensation
Working capital
• Payment timing
• More accurate forecasts
IT
• Segregation of Duties
• Authorized access only
• Server configuration for performance & security
Compliance
• AML (financial services)
• FCPA
• Evidence of proper controls

19. IMPEDIMENTS TO 100% DATA
INSPECTION
Existing tools not up to the job New tools too difficult
“businesses also tend to have
expensive “shelfware” that no
one uses”
- Data Analytics, ISACA
Excel data limits Data impurities Shelfware

20. FINDING DUPLICATES
• IDEA clients find duplicate payments even when ERP
“won’t allow” them

21. Area Control Data Analysis
Purchasing
of Goods
Application should not
allow duplicate payments.
Obtain purchase order data
Validate that no duplicate payments were processed.
POs older than 3 months
will not be processed.
Obtain a list of all POs processed. Determine if POs older
than three months were processed.
Creator of PO can’t
release/approve same PO
Obtain a list of all POs created (by originator)
Obtain a list of all POs released or approved
Determine any inappropriate segregation of duties (SOD)
Payment Application should not
allow duplicate payments.
Obtain list of all payments made to vendors in last 12
months. Determine duplicate payments, for example:
 Same vendor ID, amount but different invoice number
 Same vendor ID, invoice number but different amounts
 Different vendor ID with same bank account detail.
Segregation of duties (SOD) Obtain a list of who has processed payment & who created
the PO. Determine if inappropriate SODs existed.
INTERNAL CONTROLS ANALYTICS

22. SUMMARY
CAATs
• Can import infinite amount of data
• Meet Industry standards
• Commands are simple & audit purpose built
• Provide the ability to perform discovery and in-depth
analysis

23. CLOSING THOUGHTS
“CaseWare IDEA complemented our staff very well as running
the analysis did not involve having any programming
knowledge. Our team was able to leverage their domain
expertise and get results very quickly.”
Chief Audit Executive
US Higher Education Institution

24. LEARN MORE ABOUT CASEWARE IDEA
Contact us at salesidea@caseware.com

25. REASONS YOU NEED TO STOP USING
SPREADSHEETS FOR AUDIT ANALYSIS
AUDIT SOLUTION
Visit casewareanalytics.com
Email salesidea@caseware.com