Continuous Audit Analysis and Reporting System 4 th world continuous auditing and reporting symposium A. Nutz, E / University of AugsburgUniversity of Salford, April 18 th 2002 Computer Aided Audit Technology - for Continuous Audit A. Nutz e University of Augsburg – Germany

Continuous Audit Analysis and Reporting System 4 th world continuous auditing and reporting symposium A. Nutz, E / University of AugsburgUniversity of Salford, April 18 th 2002 Content Trends / Reasons for the project CAARS/AIS – the concept Pilots within E Next steps

Continuous Audit Analysis and Reporting System 4 th world continuous auditing and reporting symposium A. Nutz, E / University of AugsburgUniversity of Salford, April 18 th 2002 Ongoing discussion on corporate governance XBRL as a catalyst for standard (audit) routines Implications of Internet based reporting / risks by inadequate use of web trust seals Legal and contractual obligations intensify the consideration of: - Risk management systems -Monitoring and alert systems The move from financial reporting to business reporting triggers the development from financial audit to business audit Current Trends / Audit Language

Continuous Audit Analysis and Reporting System 4 th world continuous auditing and reporting symposium A. Nutz, E / University of AugsburgUniversity of Salford, April 18 th 2002 The audit software has to be used on reliable, quality controlled data. *Escalating scope of audits an information system with adequate data basis („width“ and „depth“) require *Increasing audit complexity innovative analysis techniques such as Data Mining, OLAP- technologies and monitoring requires Consequences And as general precondition:

Continuous Audit Analysis and Reporting System 4 th world continuous auditing and reporting symposium A. Nutz, E / University of AugsburgUniversity of Salford, April 18 th 2002 Insufficiencies within the use of flat file based CAATS Financial Accounting Data as flat file Performs audit and Assessment of Client OLTP-System Client EDP-Employee Data Capture at due date Performs Download Toolbox of CAATS Results t = single event uses EY/IT-Employee Data Analysis Feedback on Audit Results Auditor Fin. Acc. Data Aging R/3 SAP ®

Continuous Audit Analysis and Reporting System 4 th world continuous auditing and reporting symposium A. Nutz, E / University of AugsburgUniversity of Salford, April 18 th 2002 Excel, ASCII etc. RDBMS Host Integration into EY-Methodology Improvements by data warehouse / mart based CAATS (Development of Continuous Audit Analysis & Reporting Software CAARS / AIS) Excel, ASCII, etc. Client OLTP RDBMS R/3 SAP ® EY CAARS External Sources (Gartner etc.) Import (ETL) Client EY/IT-Employee EY + client user CAARS Engagement Mart RDBMS MDDBMS Flat file Cockpit OLAP Query Import Benford Monitoring Data Mining Reporting Main

Continuous Audit Analysis and Reporting System 4 th world continuous auditing and reporting symposium A. Nutz, E / University of AugsburgUniversity of Salford, April 18 th 2002 Pilot Engagements / Findings & Results Piloting took place in six European engagements (F, GER, CH, UK) Different size of engagements Different evaluation focus (audit efficiency respectively cooperation with third party users) Different scope and location of data mart Some of the pilot findings are: Within half of the pilots third party users joined the project Within these pilots no data capture had to be performed by the audit team as it was completely automated By providing modules of different complexity (query, OLAP, cockpits) more auditors with less technical skills are using analytics. Engagement teams were regarded as “the audit teams that are doing the better audit”

Continuous Audit Analysis and Reporting System 4 th world continuous auditing and reporting symposium A. Nutz, E / University of AugsburgUniversity of Salford, April 18 th 2002 Pilot Engagements / Findings & Results Pilot findings (cont.): Time savings were achieved by improved integration of modules. With standard audit routines time savings for analytic procedures are estimated to approx. 15 to 30 % of time spent for the current ad hoc approach. With standard audit routines integrated, AIS will be ‘THE SOLUTION’ and a competitive advantage. Especially the use of the OLAP-module improved the image as auditor.

Continuous Audit Analysis and Reporting System 4 th world continuous auditing and reporting symposium A. Nutz, E / University of AugsburgUniversity of Salford, April 18 th 2002 CAARS – Next Steps CAARS Improved ad hoc capabilities Improvement of data capture capabilities (mapping facility) Integration of further modules: Regression analysis Trend analysis Fuzzy logic component STANDARD ROUTINES Data Warehouse Approach Enhancement of scalability Enhancements on fully automated data capture Further development on cockpit and monitoring versions PROCESS MEASUREMENT (KPI) Audit methodology enhancements

Continuous Audit Analysis and Reporting System 4 th world continuous auditing and reporting symposium A. Nutz, E / University of AugsburgUniversity of Salford, April 18 th 2002 Development of audit standards and business applications Audit Standards

Continuous Audit Analysis and Reporting System 4 th world continuous auditing and reporting symposium A. Nutz, E / University of AugsburgUniversity of Salford, April 18 th 2002 Questions? If you have any questions please do not hesitate to contact me: 0049 /