Electronic Audit Management Systems

“Automated Working Papers”

Project & Resource Scheduling

Risk Assessment
Electronic Work papers
Knowledge Management
Reporting
Project and Issue Tracking

Pamela McCoy, CPA, CIA, CISA

Senior Product Manager
TeamMate Product Development Team
October 9, 2003
 Agenda

 Paperless Audits: What, Why?

 A few questions for you
 Paper-based Audits: A unique study
 Paper-based “pains”
 Standards?
 What should you expect from your system?
 Other Considerations
 What should you do?
 Challenges and Questions
 Paperless Audits – What?

Any audit that is electronically planned,

documented, indexed, referenced,
reviewed, reported, and stored.
 Paperless Audits – Why?

 Enhance and improve auditor efficiency & effectiveness

 Manage and leverage knowledge
 Reduce, or even eliminate, non value-added activities
 Improve business decisions
 Manage and share information
 Standardize the “usual”
 Promote consistency in approach
 Promote timeliness in reporting
 A Few Questions for You
 What is your E-mail package?
 How do you share audit information?
 What is your Operating System platform?

 What are your typical audit dynamics?

 Time – weeks and/or hours
 Do you work in teams?
 Work from the office or from the field?
 Levels of review?

 When do you want to implement?

 Why do you want to implement?
 Have you seen other systems?
 Paper-Based Pain #1: Preparation

 Write, print, and manually annotate (cross-reference,

tickmark, signoff)

 If edits, re-write, re-print, re-annotate

 Repagination and/or incorrect cross-referencing

 How to locate and re-use prior workingpapers

 Lack of standardization in set up and audit approach

 Paper-Based Pain #2: Review

 Reviewer must be where the working papers are

 Working papers must be complete

 Reviewer must search to find items “ready for review”

 Review comments or post-review edits mean the process

must be restarted

 Interruption of audit workflow

 Paper-Based Pain #3: Access & Storage
 Archival requirements – how long must you keep them?

 Where do you keep them?

 How can you find them?

 Storage costs

 Security

 Multiple files are heavy

 No easy way to back up paper

 Paperless Audit Standards
 AICPA, IIA, and GAO standards are vague

 Permit use of media “other than paper”

 Courts accept electronic evidence and signatures

 Electronic signature must be under the signer’s sole control

and verifiable

 We must assume the evidence and documentation

requirements are the same as paper working papers
 What Features Should You Expect?
 MUST incorporate your process
 Flexible operating model
 Drives consistency in audit process
 Real-time preparation and review
 Minimal workflow interruption
 Electronic signature integrity and control
 File security – encryption technology
 Intuitive look & feel
 Automatic indexing and referencing
 Imaging technology
 Report generation – in YOUR format
 Understandability and reliability
 DBMS
 Other Considerations
 Your IT Infrastructure – How will you share information?

 Microsoft vs Lotus Notes platforms

 Supportability and maintenance

 Time to build and incorporate into current plan

 Help desk – yours or the vendor’s?

 Training – who, how, where? How often?

 Other costs – PC or NW upgrades, scanners, turnover

 So What Should YOU Do?
 Understand, agree on, and document your current process

 Establish your protocols

 Identify and understand your requirements

 Hardware
 Network
 Documentation

 Talk to the vendors – can you test the product?

 Talk to the users – yours and theirs

 Allow for and accept a learning curve

 Challenges and Questions
 Agreement on basics

 Acceptance

 Learning curve

 Support from the “top” – use is not an option

 Fear of change – “If it ain’t broke, don’t fix it”

 How about “If it ain’t broke, break it?”