AUDIT ANALYTICS AUDIT

AUDIT ANALYTICS AND CONTINUOUS AUDIT:LOOKING TOWARD THE FUTURE
will also notify higher-ups. The goal of this procedure is to ensure that all
exceptions are corrected, but this design choice also has managerial
implications. It helps supervisors to see the types and frequencies of
exceptions that are occurring so that they can consider whether their
subordinates are taking too many liberties with the rules, or whether the
rules themselves might need to be changed. Alternatively, particular
patterns of exceptions might indicate that specific processes may need to
be improved.
In 2013, the vice president of controls management instituted a valuable
innovation to the CCM program. Because the CCM program already
automatically identifies new exceptions daily, he realized that the same
approach can be applied to notify the owners of the analytics, on a daily
basis, when their previously flagged analytic exceptions have been fully
corrected and resolved in the sub-ledger. Therefore, noteworthy
efficiencies in the CCM process became achievable. This drove the
creation of a CCM functionality that the vice president of controls
management refers to as "Auto Close." The Auto Close feature eliminates
the requirement for the owner of an analytic to update the status of a
corrected and closed exception manually on the website. The benefits of
Auto Close include avoiding the manual step of closing the items on the
AX Exception website, typing comments, and/or uploading supporting
documentation. In addition, this new process ensures a real-time status of
corrected items on the website for improved transparency of unresolved
items because, at times, the step of updating the AX Exception website
manually may not be timely or fully maintained. The Auto Close feature
also ensures strong change management through logging of the data
corrections on a before-and-after view and archives this information as
an attachment in the history audit trail in the AX Exception website. Auto
Close confirmations are automatically emailed to the analytic owners as
they are identified by the CCM Program.
The vice president of controls management indicates that, although most
people think of a CCM program as a detective control, the benefits of the
CCM program reach further if planned and incorporated carefully. The
program can also be a preventative control because it monitors
transactions as they occur during the month, and identifies exceptions
daily (or in real-time) and corrects them immediately (or at least before
the end of the month). Therefore, the exceptions are corrected in the
sub-ledger prior to the month-end closing process. As shown in the
following diagram, this eliminates the need for the accounting function
to book correcting journal entries manually and results in a clean general
ledger without manual adjustments. The vice president of controls
management says, "It’s a win-win for the business operations and the
accounting function. We can target common sources of correcting journal
entries as analytic targets in the CCM program."
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