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Going it alone has its perks and pitfalls. For single-shop auditors, technology works as an extension of the professional’s expertise, taking on tasks that would otherwise be delegated to staff. Intelligent automation is gaining the interest of business leaders. It has the potential to free auditors to develop insights, focus on high-risk areas and provide advice to stakeholders.
When approached in the right way, automating repeatable tasks is like having a virtual team of auditors working alongside you. It also helps sole practitioners brew their own secret sauce the competition can’t touch.
We caught up with two CaseWare IDEA® users who are automating processes to extend their reach and deliver more value.
Wayne Bushman began his career as a code warrior. He worked as a software developer and then later as an IT auditor, where he first learned to use data analytics. After more than a decade with Salt Lake County, he decided it was time for a change.
Wayne joined Snow College as Director of Internal Audit where he dually reports to the president of the college and the audit committee chair. With no staff and an annual operating budget of just $7,000, Wayne welcomed both the freedom to build a stellar audit program and the challenge of going it alone.
Since Snow College did not have an internal auditor on staff for the prior year, Wayne started by evaluating previous audits and reviewing current policies and procedures.
“This was my opportunity to start fresh and build a successful internal audit function from the ground up,” said Wayne. “I wanted to prove myself and approach everything from a different angle. My initial goal was to establish value by producing some high-impact audits – something that would make other departments take notice. My end game was to change the perception of internal audit from the “gotcha guy” to someone they saw as a collaborative resource.”
Because of his prior experience, Wayne chose to incorporate data analytics into the audit program at Snow College. His initial data analytics goals were simple and straightforward:
Even those who have the will and stamina to go it alone need to collaborate. Snow College is part of the Utah System of Higher Education (USHE). Since several of the USHE institutions were already using IDEA, and to increase collaboration with group members, Wayne decided to give IDEA a try.
“As a former programmer, I never found data analytics tools difficult to use, but I was unsure of the time investment needed to learn a new tool,” said Wayne. “I signed up for the IDEA Fundamentals course and was pleasantly surprised at how easy it was to learn IDEA! The course was great, and the instructor walked us through every step. He demonstrated the features that would save us the most time to gain traction quickly. The training was excellent and provided a great foundation to work from. You don’t need to be a computer programmer to be able to use IDEA.”
Although Wayne was mid-way through a data-intense audit using another data analytics tool, he decided to abandon it and start using IDEA.
“I know for a fact, the audit would have taken me much longer to complete using the other tool,” said Wayne. “What impressed me most about IDEA was how it organizes the data structures. You can start with raw data and drill down to create snapshots. It’s much easier to go back and see what you did, then repeat a particular procedure to save effort. I was immediately sold!”
The USHE group has scheduled hands-on training through Audimation Services to boost their skills and find new ways to use IDEA in their work. USHE IDEA users are also discussing other ways to share scripts and further collaborate on their data analytics processes using the tool.
After making some headway on his initial goals, Wayne added two more objectives:
He plans on applying automation to create a “virtual audit team” to cover more ground without any additional staff.
“My long-term vision is to identify a couple of tasks at the completion of each audit that can be automated and develop scripts to rerun processes for the same, or a different, entity,” said Wayne. “By building these directly into the shop, I will also increase my efficiency and effectiveness. I set achievable goals. Over time, I will have a library of automated processes that would just need minor tweaks as the data evolves and changes.”
For example, Wayne used data analytics to perform a five-year trend analysis on budget and expense data. He connected to ERP data, pulled in transactions from funds and accounts for the entity he audited and used scripts to repeat the analysis. Through this process, he could track trends, positive or negative, on any department to evaluate spending patterns across the organization. The budget and expense analysis that took up to a week to manually complete could be completed in less than an hour. Now that Wayne is using IDEA for data analytics, he is developing scripts to further streamline and automate this process.
“Most universities operate on a lean budget, so efficiency is always top of mind,” said Wayne. “Our audit committee is sold on data analytics. The high-impact audits I’ve conducted so far helped them see the value of it, and now I have people approaching me for help.”
Wayne has also found success in converting hard copy and pdf bank statements to electronic files using IDEA’s Report Reader tool. Doing so has helped streamline time-consuming manual reconciliations of bank statements that were no longer available in electronic format. Doing this has helped other departments at the College find new efficiencies in their business processes through the use of IDEA. This is an example of how data analytics can be used to add value across the organization.
Wayne advises auditors to be upfront with the audit committee about the time investment involved, and the potential time savings of automated procedures. It may mean one or two audits have to be shaved off the annual plan to allow time for script development and maintenance, but the long-term returns are well worth the effort. He encourages auditors to start with high-impact areas, like risk assessments.
“For every audit I conduct, I create at least two scripts,” said Wayne. “In about 4-5 years, the library of scripts I’m developing should equate to the workload of a full-time auditor. It’s worth the time.”
Barr CPA LLC is a boutique CPA firm specializing in forensic accounting, fraud examination, business valuation and tax controversy issues. Like Wayne, Jacob Barr works independently and uses IDEA to help him elevate his firm’s capabilities.
“The arrays of IDEA allow us to quickly and securely upload, cull, manipulate, dissect and connect the data to create precise real-time productions of our clients’ litigation, audit and investigation discovery objectives,” said Jacob. “We deep-dive into the data to draw inferences for identifying anomalies and patterns linked to the occupational risk fraud associated with conflicts of interest, financial misstatements and misappropriations.”
Jacob has turned his use of IDEA into a proprietary automated workflow toolkit he calls his “superpower.” He can blend and filter mass quantities of raw records to prepare cases for his clients in impressive amounts of time.
These workflow tools save him days of effort and turn his one-person shop into a virtual workforce. Some of the forensic audits he conducts contain upwards of 40,000 records that must be normalized to find comparisons between data sets. Unifying the data takes approximately 25-30 formulas, which Jacob manually records to create macros. When he has similar data and analysis to perform for another client, he simply calls up the formulas and puts them work.
“Both my clients and my competitors wonder how I do it,” said Jacob. “When you’re working with 100,000 records, there is no way a human can perform this type of analysis. I actually enjoy sitting back and watching it self-execute. Each green tick mark represents something I would have had to do manually. When you have 30 functions all working together to give you a consistent output, it gives you a unique way to work – something no one else can replicate.”
With the help of the experts at Audimation, Jacob has accumulated an impressive warehouse of about 300 formulas that can be adapted and tweaked for various clients. The forensic audits he conducts often require comparisons of public records and proprietary information, which is organized in different ways. Most public records contain duplicates, which can skew the results. Jacob uses IDEA to distinguish incorrect and repetitive information within minutes.
“IDEA elevates our firm’s capabilities for customizing data views, filtering, assessments, batch exports, and printable reports with the speed we desire and the control we need,” said Jacob. “As a result, it empowers us to strategically readjust, refocus and to re‐elevate our clients’ internal anti‐fraud safeguard measures. We can deliver big-picture insights and help clients make sound business decisions. It gives us an edge.”
Interested in building your own workforce of virtual auditors? Let our team of experts help you get started – contact [email protected] to discuss your goals.
Special thanks to Wayne Bushman and Jacob Barr for sharing their progressive approaches in using IDEA.