Post on 21-Jun-2015
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“Future of Audit”(or back to the future?)
Drs Pieter de Kok RA
“Future of Flying”
To the moon and London to Sydney in just two hours
FUTURE OF HIGHWAYSBy Daan Roosegaarde
TODAY
Limited ‘BI’ & data awareness in audit & reporting domain
Limited standardisation, low efficiency in adopting new
analytics technology
IT tools are all over the place, no integrated approach
A lot of talking…
Low added value perceived by clients, low fun factor experienced by teams
Current General landscape
Assurance & Reporting services
Key Objectives of CONEY today
Provide for Smart & Easy analytics
Innovate our assurance proposition
Operating an Analytics platform
Connectivity to the max
“Automate routine activities”
Get closer to our clients
Identify new service opportunitiesData-Analytics
ProcessMining
TODAY
Basic settings
Identify continuous improvement opportunities
Analyses on risk, control, audit and performance KPI’s
Extract financial and other data from various ICT systems
Steer and respond on actuals
TODAY Basis
DeliverablesBusiness Trends & Developments
reporting
Workflows audits through process mining
Online dashboards for presentations
Audit Alerts & Exceptions
Periodic ‘Automated’ audit procedures
Starreveld based auditing – ad hochttp://
www.coney.nl/portfolio/process-mining-
demovideo/
PurchasingHours x
Freelance Rate
SalesHours x
Sales Rate
CashReceipt
CashDisbursment
TEMPservices
Cash
Payables ReceivablesCloseTo Real Time
Audit Approach Today
TODAY Basis
Deliverables
Connect with digital files
Exception management
Connectivity
Connect to different source systems
XBRL/SBR/Audit files
Open source systems
NEXT 3 TO 5 YEARS
THE EYE OF AUDIT DISRUPTION
NEXT 3 to 5 YEARS
Use open data, build smart, big data solutions for clients
Share new business insights to your clients
Extend insights to wider group of stakeholders by opening platform
Provide your clients access to an Analytical Platform
Monitor Business Performance
Increase of Advanced Business Analytics in Audit
Further integrate statistical analytics
We need to build Audit Data StandardsAround
NEXT 3 to 5 YEARS
Build New Audit Data Standards(powered by the AICPA)
• Computer procedures and controls are sitting between the data and the auditor
• Audit Data Standards facilitate development of (semi) automated audit tools
• Move away from disparate data systems and repeated request for data
• Create a COMMON DATA STORE and it is about the question ‘WHAT DATA DO WE NEED PER PROCESS’
NEXT 3 to 5 YEARS
Invest in global research to develop true automated audits
INVEST
NEXT 3 to 5 YEARS
A lot of work ahead: Data Level Assurance
(Hans Verkruijsse, discussion started in1970….)
• This is about ‘Financial Reporting and Data-Analytics*’, we need to question, ‘What Do We Get?’
• Today’s data assertions are supported by mix of GAAS, evaluation of controls, professional judgment and wishful thinking
• Tomorrow’s data assertions, in a standardized world (SBR)? How do we ensure assurance?
* In data-analytics driven audit….
https://www.nba.nl/Documents/Evenementen/2014/Presentatie%20International%20Update%2020%20maart%202014.pdf
MAART 2014..scroll to the end…
We will see more Advanced Analytics
TRADECOMPANY3.0
NEXT 3 TO 5
YEARS
Enterprise Data (xyz)
Enterprise Data (xyz) IN
PU
T
BusinessRisks
Controls
Analytics
OU
TP
UT
Data Extraction VisualisationData-Scripts & Events Logs
Tableau
PARIS
ACL BasedOnline Data-
Analytics
ALLINCLoudAUDITS
DatafactoryNEXT 3-5 YEARS
NEXT 3 to 5 YEARS
MORE STEPS TOWARDS INTEGRATION PROCESS
MINING AND DATA-ANALYTICS
Controls Performance
Business Improvements
Process Redesign
Risk management
NEXT 3 to 5 YEARS
True Revival of Dutch Audit Methodology
Starreveld
NEXT 3 -5 YEARS
INTEGRATION PREDICTIVE ANALYTICS IN AUDITS
NEXT 3 -5 YEARS
And integration of predictive analytics in audits..
TRADECOMPANY3.0NEXT 3
TO 5 YEARS
Examples predictive analytics in audit
TRADECOMPANY3.0
Company 1
Company 2Company 3
PREDICTING INTERGROUP CASHFLOW MOVEMENTS
PERFORMINGSTRESS TESTING
Online Audit Files with a lot of APPS
NEXT 3 to 5 YEARS
LOOKING AHEAD
BEYOND 5 YEARS
AUDITING THE UNKNOWN(copy link below in your browser)
https://www.youtube.com/watch?v=Zr9W5IG6LKo
MOVIE
BEYOND 5 YEARS
BEYOND 5 YEARSPROCESS MODEL
FACTORY
RETAIL
PRODUCTION
PROFESSIONAL SERVICE COMPANIES
ETC
Procurement Sales
Cash
PaymentsCash
Receipt
Top Cycle Approach Examples:
PROCESSFACTORY PROCESS MINING FUTURE
1. Global Upload SOLL Best Practice Process Models (based on Starreveld) by students, auditors and business
2. Global Download SOLL Best Practise Process Models3. Automated SOLL and IST Process Mining comparisons4. Best Practice Sharing through the Process Factory
resulting in rating Best Soll Models.
BEYOND 5 YEARSSIMULATION
CONTROLFRAMEWORK
PROCESS MINING
IMPROVE CONTROLS
IMPROVE EFFICIENCY
MANAGE RISK
REDUCE COMPLIANCE COST
Procurement Sales
Cash
PaymentsCash
Receipt
WHY SIMULATION
BEYOND 5 YEARSASSURANCEON DEMAND
(XBRL Driven)Same Data, different presentation formats
Same Data, different Assurance levels
Focussing on specific interests, by specific stakeholders
Beneficial for small & mediumsized companies
Assurance On Demand:
BEYOND 5 YEARSCONTINUOUS
STORY TELLING
Socially Focused
Using New Media
Extended Audience
Advanced Visualisation
Continuous Storytelling
BEYOND 5 YEARS
We will see Channel
AssuranceFRANCHISE
INSURER
BROKER
VALUATOR
policy
premium
damagereport
requestreport
policy w/o premium
premium w/o policy
EXCEPTIONS
Algorithms Monitoring the Channel of CompaniesACROSS THE CHANNEL ASSURANCE
BEYOND 5 YEARS
How will Internet of
Things impactProcess mining?
BEYOND 5 YEARSGamification &
Audit Education
At the end…we will see: Integration Data-Analytics & Process Mining
new tools
3.0
BEYOND 5 YEARS
WE NEED A AUDITLAB
RIGHT NOW!
THE AUDIT BRAIN….Will auditors still be
human?
Questions!?