Data about an organization’s fixed assets often contains important clues about their risk exposure, control effectiveness, and performance improvement opportunities. But turning fixed assets data into actionable insights can be a challenging process. Accounting information systems may have limited reporting capabilities, while organizational growth may increase the complexity of managing fixed asset data.

Your organization can increase the effectiveness of your fixed assets internal audits by applying advanced data and analytics (D&A) techniques.

With D&A-enabled fixed assets internal audits, Internal Audit (IA) can extract more valuable and robust insights from fixed assets data, including a broader understanding of control failures and opportunities to better align capital expenditures with other events, such as asset retirements.

How we helpThe objective of our D&A-enabled fixed assets internal audit is to unlock deeper and more relevant insights from data that may be buried deep within your organization and not accessible on the surface.

Start enabling your fixed atssets internal audits with the latest D&A techniques and take advantage of the opportunity to unlock deeper and more relevant insights about the effectiveness of controls, compliance with policies, and performance improvement opportunities.

Our analysis includes a number of tests of data for key risk indicators, including comparative reviews of asset types and classes, validation of asset data, and testing asset data with alignment to policy.

Our approachOur dedicated professionals will work closely with your business, IT and IA professionals to obtain the relevant data necessary to perform the assessment of your fixed assets program.

Upon completing the assessment, our team will compile our findings into a well-organized, intuitive report and an interactive

and dynamic dashboard, ready for use by both IA and management.

Key benefitsThrough a fixed assets internal audit enabled with D&A, we can provide new and unexpected insights derived from your fixed assets data, such as:

– Completeness of data within fixed assets registers – Clarity surrounding asset types/classes – Visibility into detailed depreciation records – Continuous monitoring, detailed internal audit program

guidance and risk monitoring through dynamic dashboards

With greater awareness and understanding of your existing fixed asset management process, management can take action, thereby making the fixed asset management process more effective and efficient.

Toward the conclusion of the project, we will also develop dynamic dashboards to facilitate IA-led continuous auditing and business-led continuous monitoring of your improved P-Card program.

Streamline fixed assetsDiscover greater value with data and analytics-enabled internal audit

Confirm understanding of fixed assets process

Obtain and validate data

Perform assessment and analysis of data

Confirm results with management

Provide summary of insights

Develop and provide reporting dashboard

© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 506106

What we deliverWe make our results available to you on an interactive, dynamic dashboard that allows easy analysis and investigation of the key indicators. Ultimately, these results can be published in an intuitive, user-friendly internal audit report for immediate use by key stakeholders across the business.

Focus Areas Example Issues Example Tests

Policy noncompliance

– Assets are not properly depreciated. – Depreciation methods are inconsistently applied. – Impairments or improvements are not

recorded properly. – Assets are not capitalized appropriately. – Asset changes and records are not maintained.

– Depreciation timing/validation – Impairment charge reviews – Asset valuation

Potential fraud and misconduct

– Fixed assets cannot be located. – Fixed assets are incomplete. – Fixed asset costs are invalid, inaccurate, or negative. – Fixed asset costs appear to be unreasonable.

– Validation of asset data including identification of missing information

Effective controls – Fixed assets are not retired or impaired correctly. – Fixed asset registers contain missing data. – Depreciation of fixed assets is incorrectly performed. – Fixed assets are misclassified.

– Asset balance and depreciation recalculation – Comparative and historical analysis of fixed

asset balances

Performance improvement

– A comprehensive fixed asset strategy cannot be implemented.

– Budgeting and planning for capital assets is difficult to perform.

– Work order and cost management is not streamlined.

– Data can be difficult to validate or standardize.

– Historical year-over-year depreciation and trending

– Asset spend by class, division – KPI identification and build-out – Useful life remaining analysis

What we look for Our D&A-enabled fixed assets internal audits focus on four key areas: policy noncompliance, potential fraud and misconduct, effective controls, and erformance improvement. By performing an array of different analytic tests on volumes of fixed assets data, we are able to identify a variety of common issues in the management of fixed assets.

© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 506106

ContactFor more information about how KPMG can assist your organization with a fixed assets internal audit, leveraging D&A or continuous auditing, please contact:

Jim Littley, Principal Global and Americas leader for Continuous Auditing and Continuous Monitoring services T: 267-256-1833 E: jlittley@kpmg.com

Brian Greenberg, DirectorData & Analytics-enabled Internal AuditT: 216-875-8206E: bgreenberg@kpmg.com

The information contained herein is of a general nature and is not intended to address the specific circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.

Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates.

© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 506126

Why KPMG?KPMG has performed numerous D&A engagements in the United States and globally for decades. Beginning with our forensic D&A methodology developed over 10 years ago, we have been able to take that knowledge and transform it into a process supporting D&A in audit, investigations, regulatory compliance, litigation, controls testing, business intelligence, and continuous auditing (CA) and continuous monitoring (CM) engagements for hundreds of clients.

We have transformed our own IA methodology incorporating D&A concepts and techniques throughout to guide our Internal Audit, Risk and Compliance Services (IARCS) professionals in leveraging D&A integrating CA/CM, enabling the ability to:

– Enhance overall risk and control oversight capability through early detection and monitoring

– Increase insight into the factors important to the business – Enrich reporting value to your board and C-level management – Deliver regular insight into the status of controls and transactions

across the entire enterprise – Leverage automation to efficiently test a broader range

of transactions and controls.

KPMG’s global D&A and CA/CM methodologies have been used successfully in thousands of engagements. Combined, these provide consistency of approach while also allowing the flexibility to accommodate our client’s needs.

In addition to our tested methodologies, we have resources across the globe with an emphasis on D&A. We bring a group of D&A professionals that are not only specifically focused on IA, but are also connected and work closely with local engagement teams as well as other firm D&A professionals, such as KPMG’s centralized D&A solution center, the KPMG Lighthouse. The KPMG Lighthouse provides access to advanced D&A capabilities, resources, and technology platforms to support our professionals and engagements. It also helps harness the robust data & analytics capabilities across the firm, connecting our professionals to the entire D&A network. Our pool of D&A professionals (both within our IARCS and other Audit, Tax, and Advisory groups) focus on D&A engagements, supporting strategy development, pilot execution, D&A training, tool assessments, audit, investigations, regulatory compliance, litigation, controls testing, business intelligence, and CA and CM.

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