technology in the pwc audit driving innovation · at pwc, we are driving audit innovation, with...
TRANSCRIPT
Technology in the PwC AuditDriving innovation
www.pwc.com
Confidential. © 2016 PricewaterhouseCoopers LLP. All rights reserved
At PwC, we are driving audit innovation, with technology at its heart. The ability to merge market-leading technology with the skills of our people and a robust audit approach is now central to our global audit strategy and delivery. It is the fusion of these three elements that defines our value and drives the audit. The result is quality, efficiency and insight, delivered in equal measure.Humphrey Choi | China, Hong Kong and Asia Pacific Assurance Leader
People Approach Technology The PwC Audit
3 Technology in the PwC Audit
We are at the forefront of the profession in the way we are re-engineering and bringing innovation to the audit with three unique technologies — Aura, Halo and Connect.
Our global ERP system driving global quality
and consistency
Market-leading technology that is revolutionising our audits by
harnessing the power of data
A collaborative workflow tool allowing fast, secure
information sharing
Aura Halo Connect
4 Technology in the PwC Audit
Aura, our single instance software, ensures that things are done one way — the rightway — consistently and efficiently, globallyand locally. It is used by 87,000 auditors worldwide, on every PwC audit. The result is all of the elements of our audit fitting together seamlessly.
5 Technology in the PwC Audit
Risk Process Reference Inherent Risk Expected Controls Reliance AssertionsPlanned SubstantiveEvidence
Aura. Our global ERP system driving global quality and consistency.
Aura’s key benefits:
Single instance global software with embedded industry IP enabling consistency, synergy and scale.
A systematic risk-based approach, meaning we focus on the things that matter.
Workflow technology that allocates audit procedures and individual tasks on personalised dashboards, enabling the timely execution and review of work.
A workshare feature designed for shared service centres and multi-location audits, allowing us to work collaboratively, eliminating duplication.
Real time monitoring of engagement quality and progress — available on mobile devices, any time, anywhere.
1
2
3
5
4
Quality checks built in Aura has built-in quality checks, helping teams determine the right level of work
Reduces duplication and omission Aura comes with preloaded risk software that helps us identify the right risks and do the right work against them
Intelligent risk assessment Risk settings enable teams to tailor Aura to specific scenarios, taking account of risk levels, controls reliance and substantive testing
Risk benchmarking and insight Aura allows us to benchmark across our client portfolio and provide valuable insights
6 Technology in the PwC Audit
Aura workflow technology. Enables appropriate review and supervision of audit work.
Automated workflowAura’s workflow technology allocates audit procedures and individual tasks, tracked on personalised dashboards
Innovative interfaceIn-built voice recognition enables teams to work with the technology in new ways
7 Technology in the PwC Audit
Aura Now. Real time, on-the-go information on the quality and status of engagements.
Access on the goAura Now acts as an early warning system, providing real time information on the quality and status of engagements
Focusing effort With just a few clicks on a smartphone, tablet or laptop, progress can be visualised, highlighting areas where we need to focus
Alerts14
FSLIs not in scope above PM 1
FSLIs in scope with no EGAs 2
Non-standard risk slider settings 1
EGAs with out of date content 1
Risks with assertions without EGAs 1
Signifi cant risks with no test of details 1
EGAs with >= 5 assertions 1
Custom EGAs with no tailored 1
Exceptions with no CD/W 1
Substantive exceptions with no 1
All engagements
15:33 100%
Progress%
All engagements
Overdue1
Deadline approaching
On track
13
82
Reviewed-fi nal4
434
15:33 100%15:33 100%
14 Alerts
My tasks145
Due434
All engagements
Early warnings Aura Now’s powerful monitoring and analytics capabilities enable a smooth close process
8 Technology in the PwC Audit
Count. Automates the recording of inventory count testing.
Initial procedures
Test counts
Tag/Sheet to Floor
Floor to Tag/Sheet
Questions
Tag/Sheet summary
Cut-off
Conclusions
1%
87%
0%
8%
0%
100%14:324G 100%14:324G
0%0%3%
1 2
Test Counts | Questions
Tag/Sheetto Floor
Floor toTag/Sheet
Questions
Test Count Wall to Wall
1. If packaged contents in standardsealed quantities either vendor orentity packaged) were on handdid we examine the contents andcompare it with label descriptionsfor some packages?
Yes – provide details of ourexamination and the basis of ourselection of packages
No – provide rationale fornot examining the contents ofpackaged...
Viewing as Magdalena Nandsik
CountMetro_1EngagementABC_Count_UATLast server sync: 08 August 2016 2:31pm
Status
Initial procedures
Test counts
Tag/Sheet summary
Cut-off
Conclusions
© 2010-2016 PwC. All rights reserved. PwC refers to the PwC network and/or one more of its member fi rms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
Sync
Submit
0%
0%
8%
0%
?
Switch instance
100%14:324G
Real-time syncingEnables real time tracking of status by engagement teams
Submit results for inclusion in AuraSummary of results are aggregated for export into Aura
Quality and consistency A standard set of questions is completed to conclude the process
At a glance status Overall status capturing inventory count progress
9 Technology in the PwC Audit
Company ABC Herb LesterData from PwC’s ClientDetail to Confi rm Your response per:
PwC’s Confirmation System. Automates the end-to-end external confirmation process.
Streamlined process Details are entered once and tracked throughout enabling a secure and efficient process
Secure and ISA compliant
Automated system Automates the process including export to Aura and supports paper confirmation
AccessibilityThe enhanced process works for most types of confirmationand includes a language translation capability
In-built logic and visual indicators Enhances user experience for both auditor and confirmer
10 Technology in the PwC Audit
Halo, PwC’s data auditing technology, is revolutionising our audits, enabling greater assurance and deeper insight by harnessing the power of data. It scans huge volumes of business-critical data, enabling improved risk assessment, analysis and testing, and unlocking insight.
11 Technology in the PwC Audit
Company ABC 2015.01.01 – 2015.12.31Journals
Cash
and c.
..
Operat
ing...
Operat
ing...
Suppor
t tr...
Gross
inve
...
Gross
sal...
Cost o
f sa..
.
Cost o
f sa..
.
Gross
sale.
..
Gross
inve
...
EllisIsa
acLia
mSte
ve
Reece
Steve
Liam
EllisIsa
ac
Reece
Randy
Reece
Isaac Ellis
Liam
Randy
Reece
Steve
Liam
Isaac
Automated vs manual
% manual 54%
Top 5 manual users
Top userEllis
Dashboard30,178Total no journals
3,168Journals < GBP 10
7.2Average lines per manual journal
7Number of users
1Users posting < 10 journals
Company code
Selection: All
Bottom 5 manual users
Bottom user Randy
Top FSLI Gross inventories
% manual 4%
Top user Steve
Bottom userRandy
Currency: Common rate
Selection: GBP
Top 5 FSLI
Top FSLIGross sales
Value GBP (m)21.3
Volume274,037
Volume1,332
Volume577
Volume3
Value GBP (m)146.6
Value GBP (m)55.0
Value GBP635,102
Common rate
Local
Halo for Journals dashboard
Halo. Market-leading data-auditing technology that scans and visualises information.
Halo’s key benefits:
With Halo, all transactions can be interrogated. This increases the quality of testing and helps us better assess risk and focus on the things that really matter.
Halo is designed to work on any information from any system. This not only makes Halo accessible to all of our clients, it also drives our ability to benchmark and provide insight.
Testing can now be performed off-site and throughout the year, supporting a smoother audit process.
Halo’s in-built algorithms, visualisations and benchmarking help our teams better understand our clients’ businesses and provide meaningful insights.
1
2
3
4
Built-in testsOur IP is embedded into algorithms, built on our global knowledge and experience
A snapshot of your businessKey metrics deliver insight and enable comparison with others
Insight on usersMetrics provide a profile of users, highlighting unusual activity
12 Technology in the PwC Audit
Halo for Journals. Helps identify higher risk transactions and process inefficiencies.
Journals
Test: All data
Test variables
FSLI | Account code and name | Creator ID | Month | Period | Source | Day | Time
Value | Volume
Company code
Selection: All
Manage filters Clear all
Manual fi lter Automated Manual
Current selections
Common rate
Local
SatThu
Fri
Wed
Mon
Sun
Tue
Company ABC 2015.01.01 – 2015.12.31 Currency: Common rate
Selection: GBP
Distinct journals Journal lines Total debits Total credits Total net PL136 457 25,080,444 -25,099,573 -3,539,678
Journals
Test: Unusual amounts
Test variables
Enter amounts to search separated by pipe ( | )
Amount greater than or equal to
0
1,400
Journals
1,200
1,000
800
600
400
200
Distinct journals Journal lines Total debits Total credits Total net PL66 (excl. 131) 22,873 (excl. 74,062) 5,696,616 (excl. 4,897,088) -5,696,616 (excl. -4,897,088) 10,774 (excl. 711,836)
Accou
nts...
Accou
nts...
Cost o
f sa..
.
Gross i
nv...
Interc
omp..
.
Other a
cc...
Returne
d ...
Prepaid
e...
Sales t
ax...
FSLI | Account code and name | Creator ID | Month | Period | Source | Day | Time
Net value | Gross value
Cash a
nd ...
Deferre
d i...
Gross s
al...
Operat
ing...
Suppo
rt tr...
1,600
Value (000s)
Company ABC 2015.01.01 – 2015.12.31
50
40
30
20
35
45
25
15
10
5
0
Company code
Selection: 3 of 10
Currency: Local
Selection: GBP
Manage filters Clear all
Manual fi lter Automated Manual
Current selections
100
1,000
Common rate
Local
JournalsLocal amount debitLocal amount credit
CreditDebit
Intercompan... Cash and ca... Accounts re... Gross invent... Intercompan... Cost of sales... Operating e...
Distinct journals Journal lines Total debits Total credits Total net PL100 338 25,080,310 -25,099,428 -3,539,736
Journals
Test: Unexpected account combinations
Test variables
Inclusive Exclusive Key account debit Key account credit
Key account minimum amount:
FSLI GL account
0
Open FSLI selector
Manage filters Clear all
Manual fi lter Automated Manual
Current selections
Key FSLI Cash and cash equivalentsOffset FSLI Insurance receivables
FSLI | Account code and name | Creator ID | Month | Period | Source | Day | Time
Gross value | Volume
Gross invent... Intercompan... Cash and ca... Accounts re... Gross sales... Intercompan... Accounts pa...
Company code
Selection: All
Common rate
Local
Currency: Common rate
Selection: GBP
Company ABC 2015.01.01 – 2015.12.31
Manage filters Clear all
Manual fi lter Automated Manual
Current selections
Creator ID list Reece
Distinct journals Journal lines Total debits Total credits Total net PL65 542 52,434.00 -52,434.00 20,643.31
FSLI | Account code and name | Creator ID | Month | Period | Source
Net value | Gross value
Company ABC 2015.01.01 – 2015.12.31 Company code
Selection: All
Currency: Common rate
Selection: GBP
Common rate
Local
0
14000
12000
10000
8000
6000
4000
2000
16000 14
12
10
8
6
4
2
0Ja
nFeb Mar Apr
May Jun Ju
lAug Sep Oct
Nov
JournalsValue
JournalsValue (000s)
Journals
Test: Unexpected users
Test variables
Find selected Find unselected
Creator ID list
Wall Reece Wilkinson Khoury Jones Abramov Robinson Sharma Doyle Patel Aziz Dixon Patel Kapoor Amari Dernov Lau Malik Taylor Jackson Miller Hamid
Are people wasting time posting entries twice, or
reversing them?
Is someone outside of the finance department posting journals?Are journals being
posted when you wouldn’t expect them to be? Are there unexpected journals
posted to key accounts?
13 Technology in the PwC Audit
We have built a number of Halo applications for different industries and risks. Here are a few examples.
Segregation of duties | Customers | Sales and distribution (details) | Customer master data | Sales orders | Invoice documents
39,289,363
5,949
39,230,978
39,246,972
0
0
30,000
Invoice documents
Outline agreements
Sales orders
Deliveries
Debit memo request
With ref. to other docuements
External
W/o. reference
Cancelled invoice documents
771
26
5,949
7
100 100%
100
0
0
1,390
39,230,978 100%
24,388,770
0
0
744
744
0
0
1
100
1
24,394,407
30,000
62%
100%0 0
0%0%
0
0 0
0%0%
0
0 0
0%0%
0
0 0
0%0%
0
39,253,414 744
96%100%
100
30,000 1
0%0%
1
5,949 26
3%0%
26
Company ABC to 01.01.2015 – 31.12.2015Halo for SAP
DashboardKPI Dashboard
Postings in fi scal year
Analysis
Analysis sell
Process audit
Manual price change
Reconciliation ERP SD/FI
Contra accounts to revenue accounts
Settlements receivable
Cut off revenues
Balance sheet oriented account
Month | Period | Supplier
Overall Remaining Selected Immaterial
Total population count Total population amount (Net) Total population amount (Abs.)44,112 103,598,194.64 103,598,194.64
Company ABC 01.07.2014 – 30.06.2015 Company code
Selection: All
FSLI
Selection: All
Mid Tier: Purchase to Pay
Test: ToD selector
Test variables Clear all
Purchases Open POs Accounts payable Post-YE invoices Payments Credit notes
0
>= 0 < 100
>= 1,600 < 1,700
>= 1,000 < 1,100
>= 1,500 < 1,600
>= 900 < 1000
>= 1,400 < 1,500
>= 800 < 900
>= 1,300 < 1,400
>= 700 < 800
>= 400 < 500
>= 1,200 < 1,300
>= 600 < 700
>= 300 < 400
>= 1,100 < 1,200
>= 500 < 600
>= 200 < 300
>= 100 < 100
AXA (000s)
Jul ‘1
4
Aug ‘1
4
Sep ‘1
4
Oct ‘14
Nov ‘1
4
Dec ‘1
4
Jan ‘
15
Mar ‘15
Feb ‘1
5
Apr ‘15
May ‘1
5
Jun ‘
15
Targeted Non-statistical
Desired level of evidence
Low Moderate High
Performance materiality
Manage filters Clear all
Current selections
High value
Risk
Unpredictable procedures
>PM
High value 0 0 0.0%
Risk 0 0 0.0%
Unpredictable 0 0 0.0% procedures
Total 0 0 0.0%
Remaining 44,112 103,598.195 100.0% population
No.items Abs.amount %
T4 V7 Final 01/08/2014 – 31/07/2015, CP Jul 2015Performance Analyser
DashboardPeriod
Year to date Quarter Equivalent quarter
90,815 -6%Revenue
43% 0%Gross margin
8% 1%Operating margin
5% 1%PBT margin
Rev
GP
PBT
Summary | Working capital related analysis & liquidity
A AS SS SO OO ON NN ND DD DJ JJ JF FF FM MM MA AA AM MM MJ JJ JA AJ JJ J
PBTGross profi t
CurrentPrior
-6%
-5%
PBTRevenue
-5,602
-1,968
Revenue and PBT trend Gross profit and PBT trend
PBT bridgeKPIs
7%290
CPNet Fin Cost OtherGPPP Op Exp
Intercompany Inc.
One-off items Inc.
No. of portfolios No. of instances No. of securities Client value (base) 1 189 167 53,458,937
Country
CH DE DK Other SE US
In/Out Scope
Selection: All
Dashboard
Audit currency
Selection: USD
Current selections Clear
Company ABC 2015.01.01 – 2015.12.31Investments
Income statement | Balance sheet | Custom reporting
Flux analysis | Common size | Component analysis | Expectation | Final
Composition of income statement for 2015 YTD by FSLI in £(000’s) Composition of income statement for 2014 YTD by FSLI in £(000’s)
T4 V7 Final 01.08.2015 – 31.07.2015, CP Jul 2015
Current selections
Performance Analyser
Financial statements
Variable selection Clear all
Period
Year to date Quarter Equivalent quarter
Analyse by
FSLI Company
Comparison
Actual Budget
Exclusion
One-off items Intercompany
Halo Performance AnalyserAnalyses key indicators and drivers of business performance to assess risk and identify trends, insights and outliers
Halo for InvestmentsOur investment valuation auditing tool analyses a client’s investment portfolios, from risk assessment through to substantive testing, using higher quality, more extensive data sources
Halo for Mid-tierOur data auditing tool for companies using smaller ERP systems and includes key reporting insights, audit tests and supports risk assessment
Halo for ERPOur end-to-end solution includes data extraction algorithms to automate audit testing and risk assessment
14 Technology in the PwC Audit
Connect is our collaborative workflow tool, providing fast, efficient and secure information sharing at every stage of the audit. It monitors the status of information flows on a real time basis. It is available on smartphones, tabletsand PCs, allowing both you and us to check progress on the go — any time, anywhere.
15 Technology in the PwC Audit
90
75
60
45
30
15
Company plc
Dashboard Requests My Page Team Contacts
View by Project Company plc 2016
Total
PwC
Client
Me
July 2016
Month
Week
Week
Week
Week
WE
7
14
21
28
Weekly status meeting with Company plc10:00 AM to 11:00 AM
Weekly status meeting with Company plc10:00 AM to 11:00 AM
Weekly status meeting with Company plc10:00 AM to 11:00 AM
Weekly status meeting with Company plc10:00 AM to 11:00 AM
Please provide the trial balance
7Jul
Jul
14
21Jul
28Jul
29Jul
120
105
0Requested from Client Submitted to PwC Returned to Client Accepted by PwC Total Overdue
76 76
0 06
30
3 20 0 0 0
21 21
0
103
76
5
0 0 0 0
ID Project Business Unit Category Request Name Status Notices
Company plc 20161
Company plc 20162
Company group 2016
Company group 2016
Group audit work
Group audit work
Consolidated Income Statement
Income Statement Analytic
Requested
Requested
All pending requests
24
SU
4
11
18
25
MO
5
12
19
26
TU
6
13
20
27
TH
8
1
15
22
29
SA
3
10
17
24
31
FR
2
9
16
23
30
Connect. Fast, efficient and secure information sharing at every stage.
Connect’s key benefits:
Access wherever you are. Connect is available worldwide, meaning PwC and clients can access and view information relevant to their location.
A secure web-based tool. With Connect, teams can request, access and exchange audit documents and deliverables, and review the status of information requests securely.
Consolidated dashboards. Connect consolidates audit-related issues, what is being done to resolve them and progress tracking in real time.
PwC experience. Connect is a gateway into a wealth of PwC experience, giving you access to thought leadership and industry news.
1
2
3
4
Key eventsNotification of up and coming events and deadlines are shared with all team members
Real time trackingThe personalised dashboard allows clients and audit teams to track status at an overall engagement and individual level
16 Technology in the PwC Audit
We are constantly investing in technology that takes the audit to the next level to meet the changing needs of our clients. We are exploring how AI can deliver even greater levels of reliability, efficiency and insight.
17 Technology in the PwC Audit
It is the fusion of outstanding people with market-leading technology and a robust approach that makes the PwC difference.
18 Technology in the PwC Audit
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
© 2016 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
www.pwc.com