“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!?