Better Business Through Data Analysis & Monitoring My Account
Planning & Scoping Your Audit with Data Visualization

Planning & Scoping Your Audit with Data Visualization

Data-Driven Insights Save Hours of Effort

When working with a finite amount of time and resources, the audit scope must be adjusted accordingly, which is where data visualization can save hours of effort. This article provides some ways IDEA can help you plan and scope an audit using the data visualization features within IDEA. 

A picture is worth a thousand words. For years, advertisers have used images to draw us in and make us crave the products they’re selling. That same, “I gotta have it now,” experience doesn’t translate when looking at a spreadsheet stuffed with numbers. It’s difficult to absorb data, hard to read and unorganized. It doesn’t tell a clear story, but data visualization is changing the way auditors are communicating with their audiences.

When most auditors think about using data visualization, the obvious place is at the end of the audit to present findings to key stakeholders who may not always understand how rows and columns of data indicate critical issues. Showing data in a visual format gives management a better understanding of risks within the organization.

Data visualization is equally effective at the beginning when scoping the audit and conducing a risk assessment. When working with a finite amount of time and resources, you’ll need to adjust your scope accordingly, which is where data visualization can save hours of effort. Here are some ways IDEA can help you plan and scope an audit using the data visualization features within IDEA.

Planning vs. Scoping

Audit planning is the process in which the strategy is designed to conduct the audit, which defines the scope of the audit. This includes the size, nature and time to complete the audit. Audit scope establishes how deeply an audit will be performed. It includes assessing the different components of the process under review and determining which ones will be included in the audit. Both require looking at the data from different angles and perspectives to determine where resources should be allocated. This is where reviewing rows and columns of data becomes time consuming. Data visualization is far more effective at gaining a “big picture” perspective.

Planning: Risk Assessments

Risk assessments are often used to prioritize audits when allocating audit resources. Data visualization can be infused into the systematic process of evaluating risks associated with an area, activity or set of activities. Since you can’t audit everything, you need to look at likelihood, level of risks involved and potential impact. How do you do this? Where do you start?

IDEA’s Discover feature uses audit intelligence to automatically create custom dashboards that identify trends and outliers in a database with just one click. For example, if there are 4 potential locations for an inventory audit and audit hours only allow for an audit of one location, you’ll need to choose which location should be reviewed based on risk criteria. Importing inventory data into IDEA and using the Discover feature to create dashboards with pie charts, you can see materiality – the value and quantity of products by location. Which location has the greater variety and higher volumes? Some of the reports you would use in this scenario include:

  • Inventory volume by material type
  • Sales summary by material type
  • Physical inventory adjustments by material description

Tip: Use Field to Sum to look at the data in different ways. When selecting your chart type, use the “Field to Sum” drop down and select from three options: Sum, Average and Count.

Scoping: What to Include & Exclude

Once the location has been identified, you’ll need to decide which areas of the inventory cycle or process to include in the audit. Reports would include:

  • Inventory transactions by mode of transportation and movement categories
  • Material inventory adjustments (look for spikes in the data and potential errors)
  • Non-active SKUs

Use tree charts and line graphs to help identify transactions not following specific business rules. For example, when looking at payroll data, look at payments over time, multiple payments to the same employee, etc. Exception testing is also useful to identify potential audit issues. Look for exceptions to business rules and transactions or balances outside the nor from the process or business.

Data visualization is making it easier to identify areas of interest, anomalies and trends within large data sets that call for further analysis. IDEA 10.3 includes new enhancements that will save you time when planning and scoping audits.

New in IDEA 10.3

Duplicate Key detection has been added to IDEA Version 10.3, providing the ability to design dashboards

that identify counts of duplicate items (like invoice numbers or check numbers) and then to drill down further as needed. Discover can now detect Duplicate Key situations across all fields, and automatically populate the first field that it detects with duplicates into the dashboard. This allows you to identify anomalies without having to run multiple duplicate key detection tasks. It can be used to evaluate your data and look for duplicates that are exceptions rather than the rule.

For example, when looking at transaction data, invoice numbers should not be duplicated, while you expect a sales rep ID to repeat. Once the Discover dashboards are populated, you can use IDEA’s Visualization feature to further customize the dashboard to show information about other fields with duplicate keys or any other relevant field stat. Also new to IDEA 10.3 is the ability to scroll and zoom into specific areas of data. A progress bar is displayed when executing tasks.

For more tips on using the Visualization features built into IDEA, we invite you watch the 6-minute video or read how fellow IDEA users are using this capability: Article: Better Communication with Visualization.  

Information for this article was sourced from a presentation by Angel Butler, Data Resource Manager, Chevron Services Company during the 2017 IDEA Innovations Conference in Houston.

Read more about how data visualization can be used to analyze data in new ways and share your results. Get to the Point! Benefits of Embracing Data Visualization

Print

Number of views (1803)/Comments (0)

Tags:
ConnerG

ConnerG

Other posts by ConnerG
Contact author

Please login or register to post comments.

Name:
Email:
Subject:
Message:
x
Global Chemical Company Automates Risks Identification with CaseWare IDEA
14 September 2018

Global Chemical Company Automates Risks Identification with CaseWare IDEA

Global corporation used IDEA to standardize & develop an automated process to comply with anti-corruption policy.

Read More

Telecommunications Provider Turns Two Days of Work Into 20 Minutes with CaseWare IDEA®
14 September 2018

Telecommunications Provider Turns Two Days of Work Into 20 Minutes with CaseWare IDEA®

Auditors Analyzing Hundreds of Millions of Records to Track Buying and Usage Patterns

One of the world’s largest telecom companies' internal audit team leverages tech to analyze trends, tendencies & patterns within customer & financial data.

Read More

Exploring IDEA's Built-In Power of Python
20 August 2018

Exploring IDEA's Built-In Power of Python

IDEA Tech Tip

With the release of version 10.3, IDEA created a buzz with its implementation of the Python scripting language, thereby taking a huge step towards having a more robust coding environment.

Read More

Sharing IDEA Data Using IDEA's ODBC Driver
18 July 2018

Sharing IDEA Data Using IDEA's ODBC Driver

IDEA Tech Tip

Read More

Oncor Achieves Operational Efficiencies with CaseWare IDEA
25 June 2018

Oncor Achieves Operational Efficiencies with CaseWare IDEA

Oncor's internal audit team needed to acquire years of data from different environments and formats to help improve processes and efficiency levels.

Read More

Analyzing the Past to Predict the Future with Trend Analysis
18 June 2018

Analyzing the Past to Predict the Future with Trend Analysis

In business, predicting the future is never an easy task. But IDEA can help as long as you have the right data, and Trend Analysis can help.

Read More

2018 IDEA® User of Excellence Award Winner Selected
15 June 2018

2018 IDEA® User of Excellence Award Winner Selected

Jennifer Girard, CIDA with American Red Cross Recognized for Exceptional Use of Data Analytics

Jennifer Girard, Sr Auditor with the American Red Cross is the recipient of the 2018 US IDEA UoE Award. She utilized IDEA to assist Finance Department during a natural disaster.

Read More

The Rules of Nature and Audit
6 June 2018

The Rules of Nature and Audit

What’s missing is often as important as what’s present. The rules of nature apply very well to audit if you consider, “Everyone knows it, but do you test for it?”

Read More

Using IDEA to Import QuickBooks General Ledger Data
4 June 2018

Using IDEA to Import QuickBooks General Ledger Data

The General Ledger is typically the starting point to an expanse of detailed information, see a step-by-step guide on how to get a readable version in idea.

Read More

New Features in IDEA 10.3 Part II
10 May 2018

New Features in IDEA 10.3 Part II

IDEA Tech Tip

In a recent article, we introduced the improvements to Stratified Random Samples and Python integration added in IDEA 10.3. But that’s just a small part...

Read More

Cargo Company Swaps Programming-Intensive Data Analytics Software for CaseWare IDEA
10 May 2018

Cargo Company Swaps Programming-Intensive Data Analytics Software for CaseWare IDEA

Auditors Achieve More Success in First Year with IDEA Than 5+ Years with Other Tool

With the entire audit team up and running using data analytics, they are finding new ways to integrate IDEA into other areas of the business and automate repeatable processes.

Read More

Maximizing Your Environment - Global Variables
8 May 2018

Maximizing Your Environment - Global Variables

Consider scope to be a building in which people work. The tools required to accomplish their tasks will of course be housed in that building, but in scripting it’s important to determine which tools need to be shared among the buildings.

Read More

Tips on Acquiring Data
8 May 2018

Tips on Acquiring Data

An IDEA User Shares Frequent Practices

When working with rows and columns of data to spot suspicious behaviors, fraud and errors can look very similar to one another. While Yeriazarian often uses Excel as an interim format for data, he also understands there are several avenues to navigate before getting the right data.

Read More

Identifying Churn in AR
19 April 2018

Identifying Churn in AR

IDEA Tech Tip

Customer churn (customer attrition, turnover, or defection) is when a customer decides to stop engagement with your company. IDEA can help easily identify “churn” in accounts receivable by following these steps...

Read More

RSS