1. Risk-based sampling using CobiT By Rune Johannessen and Børre Lagesen October 13 th 2004 Lisabon

2. IS THIS YOUR DAY? ? PO8 PO1 DS11 AI6 PO11 AI1 PO1 DS5

3. The purpose of this session!

4. Presentation Rune Johansen – CISA, CIA, Dipl. Int revisor – 8 years experience in IT audits and quality insurance from various ministries with their subordinate agencies, private companies and system development projects. Børre Lagesen – CISA – 5 years experience in IT audit from various ministries with their subordinate agencies.

5. Agenda 1.What is the objective for this workshop 2.Background 3.Method for Risk-based sampling 4.Case studies 5.Experiences from practical use in Norway. 6.Sum up and questions

6. 1. The objective for this workshop. 1.Help the auditor to select the right areas and processes. 2.Contribute to improving the quality and performance of the IT audits in the SAI’s. 3.Contribute to an open discussion and knowledge sharing.

7. 2. Background 1.More use of CobiT 2.CobiT is highly comprehensive and its use quite time consuming. 3.This in stark contrast to our everyday situation, where time is a critical factor.

8. Background 4.CobiT does not provide clear guidelines on how to carry out an overall (or “high level”) audit risk assessment.

9. Method for Risk-based sampling 1.The method presented is not intended as a final template. 2.The presentation is based on qualitative assessments of risks. 3.The method uses the following sources: Audit Guidelines Controll Ojectives but could also use the maturity model in “Management Guidelines”

10. Selection based on targets/processes/resources Risk assessment of selected processes IT audit Phase 1 Phase 2 Phase 3 Method for Risk-based sampling

11. P1P2P3

12. Results of Phase 1: The auditor have a list of preferred processes. In our example, AI2 and AI6 were identified as the most relevant within the domain “Acquisitions and implementation”. P1P2P3

13. P1P2P3

14. P1P2P3

15. ScaleControl routines DocumentedThe audited entity has a routine, process or documentation that deals with the matter. Undocumented The audited entity does not have routines, processes or documentation that deal with the matter. P1P2P3

16. Scale Probability H It is regarded as highly probable that this process will be negatively affected by internal or external events. M It is regarded as possible that this process will be negatively affected by internal or external events. L It is not regarded as very probable that this process will be negatively affected by internal or external events P1P2P3

17. Method for Risk-based sampling Scale Consequence H Negative internal or external incidents are expected to have major consequences for the process. M Negative internal or external incidents are expected to have medium consequences for the process. L Negative internal or external incidents are expected to have minor consequences for the process. P1P2P3

18. Each process is then subject to a risk assessment where probability and consequences are considered together. On the basis of how the process is rated in terms of risk (H high, M medium, L low – in our example), they are selected for further IT audit (phase 3). P1P2P3

19. Method for Risk-based sampling IT process and audit questions Results of evaluation and testing RecommendationRef. AI6Change management Has a method been established for prioritisation of change recommendations from users, and if so, is it being used? Have procedures been compiled for sudden changes, and if so, are they being used? Is there a formal procedure for monitoring changes, and if so, is it being used? Etc. Observation: Method for changes… There is no procedure for sudden changes … Etc. Assessments: The methodology is incomplete in terms of sudden changes… Conclusion: The methodology is inadequate … We recommend … P1P2P3

20. WORK!!!! 1.Identify relevant questions for chosen processes (PO9, DS4, DS5) based on your points in “and takes into consideration”. (from 14.10 to 14.30 – 20 minutes) 2.Use the questions on the case study. Evaluate risk and conclude on further audit. (from 14.30 to 15.35 – 65 minutes including break. ) 3.Discussions (from 15.35 to 16.30 – 55 minutes)

21. 5. Practical use and experiences from Norway

22. Selection based on targets/processes/resources Risk assessment of selected processes IT audit Phase 1 Phase 2 Phase 3 Method for Risk-based sampling

23. Selection of processes P1P2P3

24. The risk assessment of processes P3P1P2

25. Result of risk assessment in four different government agencies P1P2P3

26. Result of audit P1P3P2

27. Experience it took time to develop the questions good overview of the different processes and their risks in the government agencies able to develop a good risk profile able to select the right process to audit Conclusion The risk evaluation and the IT audit led to a lot of findings that where reported

28. You can’t hide – we see it all