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KPMG’s Dynamic Audit

January 2016

kpmg.com

22

Roger O’DonnellGlobal Head of D&A, Audit

Dynamic Audit

© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

Dynamic Audit

Roger O’DonnellGlobal Head of D&A, Audit

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1.23456132356862213146

1.0256123134641312132543535

0.11280.55271.5680.66791.8887

Our Dynamic Audit takes a rigorous journey through the dataAt KPMG, we’ve been performing audits for over 100 years, and we’ve never been more excited about the value of our audits today.

Our Dynamic Audit, powered by Data & Analytics (D&A) innovations, digs deeper into

the data, revealing more about the business and its risks. This, combined with a relentless commitment to quality, makes for a highly effective, highly insightful audit. And we think that’s of value.

© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

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flow

1.23456132356862213146

1.0256123134641312132543535

0.11280.55271.5680.66791.8887

© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

Innovation is about more than the development and integration of tools. Its true value lies in the sum being greater than the parts. Our state-of-the-art workflow amplifies our industry expertise by evaluating what we’re doing in our audit and providing us with added and ongoing knowledge about the business.

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© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

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One flow. Our auditors progress smoothly and consistently through a quality KPMG audit — the first time, every time.

Effective. Automated dependencies and linkages evaluate the downstream impact of data entered up front.

Built for business. Each of our 70,000 auditors has access to the full suite of KPMG’s proven industry expertise.

New York

London

Brasilia

Global Workflow

Moscow

Tokyo

Sydney

Nairobi

Search

Beijing

0.11280.55271.5680.66791.8887

© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

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Global meets local. Auditors across our global network can interface and connect in their local language.

Online and global. Video chat, collaboration, project management, and anytime/anywhere review capabilities mean we are ready when our clients are.

Moscow

Tokyo

Sydney

Nairobi

Search

BeijingNew York

London

Brasilia

Global Workflow

1.23456132356862213146

1.0256123134641312132543535

0.11280.55271.5680.66791.8887

© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

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find

1.23456132356862213146

1.0256123134641312132543535

0.11280.55271.5680.66791.8887

© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

Our interactive audit D&A solutions, combined with our deep knowledge of the business and industry, enable us to filter, visualize, analyze, and extract information from the data like never before. Information that’s valuable to our audit.

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© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

10

Powerful new capabilities reveal anomalies and outliers that may point to previously unseen risks.

Vendor Analysis

Vendor 1

Vendor 2

Vendor 3

Vendor 5

Vendor 4

Vendor 6

Origin of Vendors

ABC Vendor Analysis

Client Company

One-time vendors

Active vendors

14,085

43,741

One-time Vendors

Total Invoices

Total Payments

Total Orders

Non-active Vendors

Non-active vendors

Active vendors

46,001

13,662

Details

$4,265,947,290

100%

$3,645,107,465

100%

$4,068,514,887

100%

Search

XL ?

Details XL ? Details XL ? Details XL ?

Customer Transaction Analysis

04/01/2014USDBU0001 11/30/2014 01/11/2015

Nature of transaction Invoice predecessor AR predecessorInvoice type Clearing type

Delivery35.3%

Subledger67.3%

Analysis Period Start Date Analysis Period End Date Extraction Kickoff Date Show Current SelectionSelect Business Unit Currency

Search

New perspectives. Interactive analysis identifies patterns such as unusual or unique transactions, customer or vendor payment trends, and potential valuation risks.

Wider coverage. Automated analysis of transactions — pricing and quantity adjustments, for instance — across the complete sales and purchasing cycles can uncover discrepancies, anomalies and potential revenue risks.

1.23456132356862213146

© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

Deeper insights. Visual analysis of the Procure-to-Pay and Order-to-Cash processes streamlines our ability to see and highlight supply chain and concentration risks, collection and payment issues, and price sensitivity and elasticity in the customer base, and this may highlight gaps in controls.

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Data science meets risk assessment. Our risk assessment applies advanced statistical modeling to identify unexpected account correlations based on an analysis of 100 percent of journals.

Signal in the noise. Our auditors have powerful tools to screen and identify journals matching industry specific pre-defined or tailored risk profiles across the organization, such as unusual or manual posting activity.

Predictive analytics. We are developing the capability to analyze macro and micro, historical and current, financial and non-financial data to determine whether the business is performing consistently — fine tuning where we may need to focus our audit.

Vendor Analysis

Vendor 1

Vendor 2

Vendor 3

Vendor 5

Vendor 4

Vendor 6

Origin of Vendors

ABC Vendor Analysis

Client Company

One-time vendors

Active vendors

14,085

43,741

One-time Vendors

Total Invoices

Total Payments

Total Orders

Non-active Vendors

Non-active vendors

Active vendors

46,001

13,662

Details

$4,265,947,290

100%

$3,645,107,465

100%

$4,068,514,887

100%

Search

XL ?

Details XL ? Details XL ? Details XL ?

Customer Transaction Analysis

04/01/2014USDBU0001 11/30/2014 01/11/2015

Nature of transaction Invoice predecessor AR predecessorInvoice type Clearing type

Delivery35.3%

Subledger67.3%

Analysis Period Start Date Analysis Period End Date Extraction Kickoff Date Show Current SelectionSelect Business Unit Currency

Search

1.23456132356862213146

1.0256123134641312132543535

0.11280.55271.5680.66791.8887

© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

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show

1.23456132356862213146

1.0256123134641312132543535

0.11280.55271.5680.66791.8887

© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

Insights come to life through impactful and interactive visualizations accessed through an intelligent interface.

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© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

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Value unlocked. The same data that informs our audit contains a wealth of valuable insights about employees, processes, and technology. We unlock this value with over 50 benchmarks and KPIs run across business units worldwide. Segregation of Duties

Count of UsersCount of UsersCount of Users Count of Users Count of UsersAB

14User Types

User Types

Department

Department

191112

Product

Product

Non-Prod13

Posting Period

Posting Period Customer

4 105 96 107 108 119 910 12

Production6

Resale11

Testing Result Overview

Customer Master Maintenance

Sales OrderProcessing

Sales Invoicing

Sales Returns/Credit Note Dispatch

ClearingProcessing

Number ofUsers

1

5

5

5

1

182

3

3,880

150

15,107,803

398,320

9,485,531

Number ofTransactions

Amount ofTransactions

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

10

5

0 0000400069 0000400042 00004000010000100055 0000402597

XL ∑ XL ∑ XL ∑ XL ∑

XL

XL ∑

Search

© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

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Business flow. We visualize the end-to-end flow of transactions through our clients’ systems to pinpoint control risks, anomalies in performance, and unusual activity.

Enhanced risk assessment. Graphical dashboards identify authorization and segregation conflicts in the organization and the specific products, transactions, and individuals which may present a risk.

Segregation of Duties

Count of UsersCount of UsersCount of Users Count of Users Count of UsersAB

14User Types

User Types

Department

Department

191112

Product

Product

Non-Prod13

Posting Period

Posting Period Customer

4 105 96 107 108 119 910 12

Production6

Resale11

Testing Result Overview

Customer Master Maintenance

Sales OrderProcessing

Sales Invoicing

Sales Returns/Credit Note Dispatch

ClearingProcessing

Number ofUsers

1

5

5

5

1

182

3

3,880

150

15,107,803

398,320

9,485,531

Number ofTransactions

Amount ofTransactions

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

10

5

0 0000400069 0000400042 00004000010000100055 0000402597

XL ∑ XL ∑ XL ∑ XL ∑

XL

XL ∑

Search

1.23456132356862213146

1.0256123134641312132543535

0.11280.55271.5680.66791.8887

© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

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value

1.23456132356862213146

1.0256123134641312132543535

0.11280.55271.5680.66791.8887

© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

What this all means for us is better audit evidence resulting in a higher quality audit. What it means for our clients is new insights into their business. All of this adds up to more value.

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© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

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Exciting new developments are closer than ‘on the horizon’.At KPMG, we’re developing tomorrow’s capabilities today with dramatic innovations to identify new levels of risk — keeping pace with a connected world.

Dynamic Audit

© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

Dynamic Audit

quality + insight = value

kpmg.com/auditdata

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© 2016 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.

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Publication name: KPMG’s Dynamic Audit

Publication number: 133128-G

Publication date: January 2016

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