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?”
Let’s start with time and space. An employee clocks in at home instead of the job site. There are only so many minutes in a day, hours in a week, weeks in a month, and months in a year. Do the numbers make sense in their time and space? You can only be in one place at a time. Does the data make sense in the business cycles, sequence and order? Events often follow a natural cycle. Identify where dates are out of sequence and validate that “once in a lifetime events” occur only once. An example would be if you are looking at a historical data set, there should not be any future dates in the dataset.
Another rule of nature is the existence and required combinations of products or services. A product must exist to be legitimately sold or resold. What is missing? What is unique? Lastly, look at the cause and effect. Every action has a ripple effect which should be documented. If inventory goes missing, the purchase and removal from the inventory system may provide the evidence you need.
When you have the data needed to answer those questions, do some old-fashioned brainstorming – What has gone wrong, then who? Find the people first, then the money will follow. You can learn a lot from the past, so assess and evaluate the historic or past issues. What types of mistakes have been made in the past? Were they financially damaging? What does the data and documentation look like when it did go wrong?
To answer these questions, you’ll need to understand the both the client’s organizational chart and its operations. If fraud is discovered, it begs the question of how the mistakes could benefit the individuals involved in the process. A good place to start is to look at enhancements and processes where no one is currently auditing. Using your critical thinking ability and your data gathering skill, all these questions could be answered and added to the auditor opinion and gives true insight into the business.
The Discover task in CaseWare IDEA® also does a quick analysis and gives you these insights ready to visualize to the client – and show them how valuable you are to their overall strategy and business intelligence. If you’re unsure about where to start, Discover can point you in the right direction.
Field Stats can be used to get statistics on numeric, time and date fields in a database. Its exceptionally helpful for checking totals, understanding the ranges of values in the database, testing for cut-off dates or amounts, identifying areas that require further investigation. In IDEA 10.3, Character Field Stats has been added to help:
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Information for this article was sourced from a presentation by Chris Peters, GPS Consultants, LLC, during the 2017 IDEA Innovations Conference in Houston. GPS Consultants is an IDEA Integration Partner specializing in custom IDEAScript development, business process automation and data analysis consulting.