Data Analytics Wichita - PowerPoint Presentation

Slide1

Data

Analytics Wichita IIA Seminar May 13, 2016

Audit & AdvisorySlide2

The New Path to Value CreationCreative destructionData trendsFuture of Internal Audit

People, Process & Technology ChallengesPractical Frameworks Taming the overloadKA&A vision exampleOpportunities and capabilities Q & A Special thanks to t

he

IIA Research Foundation & Grant Thornton

2

AgendaSlide3

“The science and art of discovering and analyzing patterns, identifying anomalies, and extracting other useful information.” - The American Institute of Certified Public Accountant (AICPA)

3Data Analytics - DefinitionSlide4

“All established business are standing on ground that is crumbling beneath their feet. The tenuousness of success is a tough fact every established business faces.”“C

reating the new commodity, the new technology, the new source of supply, the new type of organization.” - Joseph Schumpeter

4

Creative DestructionSlide5

5

Data TrendsSlide6

6Value Creation

Information Rush

Gold Rush (1850’s)Slide7

7Future of AuditSlide8

8Unprecedented Assurance

25 Samples out of 100 Exceptions25 Samples out of 1 MillionSlide9

Extraordinary efficiency & effectiveness Audit process streamlinedFieldwork time reduced

Unprecedented assurance and quality Enhanced value creationUnrivalled TransparencyData driven risk assessmentHigher value audits executed Informed decision makingDeeper insights

to support the business

Predictive

modeling to enhance decision making

9

Benefits

of Data AnalyticsSlide10

People: Talent DevelopmentFulfillment: Leverage those with

the “passion”Knowledge and skills: Build a basic understanding of data analytics capabilities and visualization tools across the team

10

People, Process & Technology Challenges

Process

:

Data

C

hallenges

Access: Lack

of data

access

Data integrity: Poor

data

quality

Legacy systems: Complex data sets across companies

Technology:

S

oftware Evolution

Spreadsheets: Excel, Access

Computer-Assisted Audit Tools: ACL, IDEA

Data visualization software : Tableau, SASSlide11

11Data Overload Slide12

12

Taming the Overload

1. Under

standing the business practicesSlide13

13Understanding the Business Practices

Risk

Assessment

Detect emerging & changing risks

Prioritized Risks

Continuous Improvement

(Incremental change)

Vision

Leadership

c

ommitment

Shared Vision

Practices

Enhanced controls / practices & metrics

Better Practices

Check

Actionable Insights

Risk based audits &

Maturity

assessments

Monitoring

Continuous Improvement

Continuous monitoring &

Auditing

Data Analytics Slide14

14

Data Analytics FrameworkSlide15

Risk optimization - Identifying, prioritizing and monitoring changing and emerging risks

Data-driven insights - Providing actionable insights through advanced analytics, monitoring and visualization Analytics talent - Developing an analytics talent pipeline for growth

Knowledge processes

- Sharing knowledge and improving processes across Koch Companies and capabilities

15

Koch Audit & Advisory Data Analytics Vision

Using economic thinking to create and preserve long term value with our business partners by driving profitable growth through

:Slide16

16Personnel Expense Analysis

Business challenge

Solution

Value created

Output

Reduction of SG&A costs

Visibility into travel expenditures

Elimination of potential waste

Earlier identification of compliance exceptions

Automated data retrieval/uploads

Outlier reports and risk scoring

Individual risk score assigned to each employee

Data visualizations with dynamic filtering

Decreased business meals spending

Reduced employee relations meal spending

Improved compliance investigations

Enhanced compliance with T&E policiesSlide17

17Rental Equipment Utilization

Business challenges

Solution

Value created

Output

Lack of visibility between plan and actual

Uncertain use of rental equipment

Lack of analysis on fuel consumption

Dashboard to compare plan and actual

Identification of un-used equipment (Comparison of fuel

log

and rental billings)

Un-used

equipment cost

Early identification of plan

and

actual gaps

Visualization of individual equipment (plan

, actual, fuel usage,

model)Slide18

18

Procurement Spend DashboardSlide19

19Procurement Buyer DashboardSlide20

20Internal Controls - Maturity Curve

Manual

Defined

Communicated

Manual

E

ntity

Defined

Centralized

Controls

Automation

Systematic

Repeatable

Centralized

ITGC & SAP Application

Automated

Optimized

Continuous

Continuous

Periodic

Manual

Automatic

Controls

AutomationSlide21

21

Stronger Internal Control Environment

Electronic Approval

Internal

Controls

Repository

Controls AutomationSlide22

22

Automated Controls

Manual Controls

Controls

Automation - LeanSlide23

23Strengthening the Control Environment

Example from a Koch BusinessSlide24

Order to Cash Customer master changeManual billings

Procure to Pay Duplicate paymentsHigh risk SoD transactions Inventory

Material master change

Cycle

count adjustmentsFixed Asset

Aged

c

apital

p

rojects

Non-standard asset

c

lasses

24

Internal Financial Controls - OpportunitiesSlide25

25

Continuous Monitoring or Auditing

Enhanced Oversight

Expanded Coverage

Greater ControlSlide26

26

Control Charting - Sensing Risk

Lower control limit

Upper control limit

Time

X

X

Control Chart - Plot over time

for a process, with an average and

upper and lower control limitsSlide27

27Control Charting - Sensing Risk

Raw material contamination issueSlide28

AppendixSlide29

29

Data Integrity - Duplicate VendorsSlide30

30Cost Reduction - PurchasesSlide31

31Vendor Footprint - Business ContinuitySlide32

Questions

Audit & Advisory