© ACL Services Ltd.

Manuel Coello

Creating Sustainable Analytics –

A Recipe for Success

ACL Connections 2013

2 / 4/3/2013

Operate as a “Center of Excellence” Transforming the use of analytics through centralized focus

1. IT Infrastructure

2. Access Controls

3. License Managements

4. System Connections

5. Data extractions

6. Project Management

7. Analytics Framework

8. Data Conversion

9. Analytics Execution

10. Investigations

15. Record Retention

16. Policy and Procedures

17. Maintain External Lists

11. Continuous Auditing

18. Quality Reviews

19. Budget Tracking

20. Visualizations

12. Research

14. Training

13. ACL Programming

Role/Skill Ops Analyst Dev

IT

Oth

er

Ex

ecu

tio

n

Chief Audit Executive

Audit Manager

Data Analytics Dev Lead

Analyst

Data Analytics Manager

Data Analytics Ops Lead

ACL Programmers

Consultants

Consultants

3 / 4/3/2013

Utilize a variety of analytic techniques Choosing the right approach

Co

mp

aris

on

Reconciliation

Keyword Search

Match versus an external list

Exact match between two tables

Fuzzy match

An

alys

is

Classification

Trending Analysis

Frequency Analysis

Stratification

Scoring Models

Sta

tist

ics

Profiling

Benford Analysis

Modeling

Sampling

Regression Analysis

Ou

tlie

rs

Even numbers

Above or right below specific thresholds

X times greater than avg or std deviation

Unusually high/low variances between periods

Exc

epti

on

s

Duplicate transactions

Sequence Analysis

Split transactions

Recalculations

Rule criteria matches

Dat

es

Aging analysis / aged transactions

Transactions with specific dates of the week

Transaction with dates out of sequence

Dates or time stamps within specific ranges

4 / 4/3/2013

Invest in documentation

Standard

Operating

Procedure

Process- Data acquisition, validation, execution, QA, delivery

Naming Convention- Projects, files, tables, scripts & fields

Data Repository- Posting of data, ACL projects & results

Policy

Technical

Document

Other

Operating on a solid foundation

Roles & Responsibilities- Define everyone’s contribution in the process

Data Management- Data retention, repository of tests & results

Governance- Change management, access

General- Context, description of test, logic

Technical specs- Technical description, required fields, parameters

Results- Output files, what to do with the results

Data Request- Fields & files need for each analytic

Examples of Analytics- Output files in Power Point

Menu of Services- Description of all the analytics & logic

Database of ERPs & Owners- All systems & IT owners

Version Controls- Tracker with all script changes

5 / 4/3/2013

Use multiple approaches to obtain data Shortening the cycle with data acquisition techniques

Da

ta R

eq

uis

itio

n

Dir

ect

Co

nn

ect

ion

Da

tam

art

S

crip

ts

Pro

cess

A

pp

lica

tio

n

6 / 4/3/2013

Build a toolbox of capabilities Delivering results by using a complementary suite of functionalities

Extraction

Format

OCR

Keyword Search

1

5

2

6

Tapping into Business Systems

Reading any type of files

Analyzing Documents

Identify docs with keywords

Utility Scripts

Statistical

3

7

Analytic Accelerators

Visualization

Reporting

4

8

Making sense of big data

Delivery method

ACL ODBC…free

Directlink…a must have for SAP

Informatica…nice add on

Unstructured data

Floating trapping

Verification of the conversion

Portability of templates

Linkage to the original report

Converts PDF into text

Allows to audit contracts

Text analytics

Analyze words in all

document types

Collecting information

directly from the archive

Leverage scripts with

standard functionality

Time savers

Maximize expertise

Profiling & modeling

Predictive analytics

Use the power of statistics

Graphs with multiple

dimensions

Use advance visual techniques

Help the audit where to look

Organized result package

Easy to follow reports

Ready to add to the w/ps

7 / 4/3/2013

Run a cost-efficient analytics practice Delivering value by being better, faster & cheaper

a) – Subjective assessment – this is not based on research

Tips

Connections to Centralized Data

W2W Process, 24 hr shifts, low transitions

Dedicated Dev Team / Project Plans

Tone of the top / Good PR

Automation, outsource

Tactical hints

Dedicated Dev Team

Add value / architect solutions

Collaboration / Analyst with biz knowledge

Availability

KPI

Turnaround Time

Areas Automated

No data from biz required

Cost per Project

% Audits using Analytics

Great-a)

30%-50%

3-5 days

50%-75%

10%-25%

Reasonable

Goal

Good-a)

< 3 days

75%

>50%

Inexpensive

>70%

Measurement Standard

% defects in QA Reviews

# Improvements

NPS

Collaborations

<1%

5 per month

>50

>9

% Issues from Analytics >25%

50-70%

1-5%

1-5

40-50

>8.5

Passionate Team

8 / 4/3/2013

Standardize best scripts for re-use Leveraging ACL to work again & again

Appending multiple tables

Data Preparation

1

2 Running totals

3 Text standardization

Statistics/profiling

Analysis

5

6 Aging

7 Regression analysis

4 Splitting field into individual words

8 Volume analysis

Even dollar amounts

Outliers

9

10 High standard deviation

11 Suspicious date ranges

12 X Standard Deviation by group

Duplicate transactions

Exceptions

13

14 Keyword search

15 Split transactions

16 Fuzzy match

9 // 4/3/2013

Leverage external lists for tests

Screening

Reference

Hierarchy Structures

Preferred Vendors

Gov Agencies

PEP/OFAC

MCCs

Banking Calendars

Corruption Index

Consolidation

Employee HR

Reconciliation

Travel Expenses ERPs

Death Index

Training courses Adult Entertainment

Physicians

Hospitals

Charities

Using data outside the box

Other

Oracle/SAP Rulebook

FCPA keyword

Suspicious words

Legal Entities

10 / 4/3/2013

Create an environment of innovation Unleashing employee creativity as a value creation tool

Work on a project of choice– no approval required

20% of time during off-peak season

Project aligned to priorities/vision

Sponsor Projects

3-5 day lock-out in the same room working on a project

Outside location

Multiple team members working toward a common goal

Time Out

Team collaboration

A person assigned as facilitator

SMEs, Business, auditors & scripter

War room / Agile

Track ideas & enhancements

Frequent brainstorming sessions

Budget for funding new projects

Other

11 / 4/3/2013

Go beyond data Thousands of data points within one view

Bar Charts

Geocoding

Trending

Heatmap Treemap

Word clouds Bubble

Network

12 / 4/3/2013

Use a variety of analytics modalities Finding the right approach

Near Real-time Analytics

• Fully Automated

• Tracks exceptions & remediation

Review process globally

• >95 company coverage

• Low-cost… great findings

Beyond numbers

• Derive risk intelligence

• Identify areas for scope adjustment

Continuous Analytics Horizontal Audits Text Analytics

Use analytics for yourself!

• Audit findings, report ratings, ombuds

• Yearly planning process

Machine learning approach

• Use statistics / identify patterns

• Learn to produce a correct output

Visual representation of data

• Relationships, patterns, outliers

• Multiple dimensions display at the

same time

Internal Analytics Predictive analytics Visual Analytics

13 / 4/3/2013

Protects the data Safeguarding the data as a core competency

Analytics execution within the server

1 Secured server

Restricted access to data & analytic results

Designated folder per each audit

2

Delicate use of data 3

Exclusive access

Remove sensitive data

Mask the data Provide only exceptions to auditors

3

Other

Document security controls Comply with export controls

4

Certified server

Access only to auditors within the engagement

Automatic purging

Period data purge

14 / 4/3/2013

Creates numerous strategic partnerships Maximizing resources & capabilities

IT • Efficient Data Acquisition Process

• Effective approach

SMEs • Operational Expertise

• Unique test frameworks – reduce false positives

Consultants • Expertise & focus

• Project Management & improvement leaps

Audit Team • Relevant approach

• Involvement in User Acceptance Testing

Outsiders / Peers • Free ideas

• Fresh views

Re

sou

rce

s C

ap

ab

ilit

ies

Vis

ion

Business Leaders • Free resources

• Future sponsorship

15 / 4/3/2013

Establish a unique employee culture Sharing common values, attitudes, standards and beliefs

• “Can do” attitude

• Independence

• Sense of urgency

• Critical Thinkers

• Leaders

• Innovators

• Communicators

Values Behavior

Thinking Simple

• Diversity

• Passion

• ETDBW

• Trained

• Teamwork

• Collaboration

• Partnership

People Difference

• Focus on better audits

• W2W

• No ROI

• QA Server / Unicode

• Workflows

• Documented w/ps

• Strong infrastructure

16 © ACL Services Ltd. ACL | Connections 2013