Transcript
Page 1: Getting Started Using ACL in Your Next Audit

Getting Started with ACL- Top Basic & Intermediate

Techniques

(2 CPE Credits) April 24, 2014

AuditNet and AuditSoftware.NetCollaboration

Brought to you by AuditSoftware.net and AuditNet®, working together to providePractical audit software training

Resource links

Independent analysis

Tools to improve audit software usage

Today focused on providing practical data analysis training

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Page 2: Getting Started Using ACL in Your Next Audit

About Jim Kaplan, CIA, CFE

President and Founder of AuditNet®, the global resource for auditors (now available on Apple and Android devices)

Auditor, Web Site Guru,

Internet for Auditors Pioneer

Recipient of the IIA’s 2007 Bradford Cadmus Memorial Award.

Author of “The Auditor’s Guide to Internet Resources” 2nd Edition

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About AuditNet® LLC

• AuditNet®, the global resource for auditors, is available on the Web, iPad, iPhone and Android devices and features:

• Over 2,000 Reusable Templates, Audit Programs, Questionnaires, and Control Matrices

• Training without Travel Webinars focusing on fraud, audit software (ACL, IDEA, Excel), IT audit, and internal audit

• Audit guides, manuals, and books on audit basics and using audit technology

• LinkedIn Networking Groups

• Monthly Newsletters with Expert Guest Columnists

• Book Reviews

• Surveys on timely topics for internal auditors

Introductions

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Page 3: Getting Started Using ACL in Your Next Audit

Webinar Housekeeping

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This webinar and its material are the property of  Cash Recovery Partners. Unauthorized usage or recording of this webinar or any of its material is strictly forbidden. We are recording the webinar and you will be provided with a link to that recording as detailed below. Downloading or otherwise duplicating the webinar recording is expressly prohibited.

Webinar recording link will be sent via email within 5‐7 business days.

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will be sent to the email address you registered with in GTW. We are not responsible for delivery problems due to spam filters, attachment restrictions or other controls in place for your email client.

Submit questions via the chat box on your screen and we will answer them either during or at the conclusion.

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Disclaimers

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The views expressed by the presenters do not necessarily represent the views, positions, or opinions of AuditNet® or the presenters’ respective organizations. These materials, and the oral presentation accompanying them, are for educational purposes only and do not constitute accounting or legal advice or create an accountant‐client relationship. 

While AuditNet® makes every effort to ensure information is accurate and complete, AuditNet® makes no representations, guarantees, or warranties as to the accuracy or completeness of the information provided via this presentation. AuditNet® specifically disclaims all liability for any claims or damages that may result from the information contained in this presentation, including any websites maintained by third parties and linked to the AuditNet® website

Any mention of commercial products is for information only; it does not imply recommendation or endorsement by AuditNet®

Page 4: Getting Started Using ACL in Your Next Audit

AuditNet and AuditSoftware.Net Collaboration

Brought to you by AuditSoftware.net and AuditNet, working together to providePractical audit software training

Resource links

Independent analysis

Tools to improve audit software usage

Today focused on providing practical data analysis training

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Richard B. Lanza, CPA, CFE, CGMA

• Over two decades of ACL and Excel software usage• Wrote the first practical ACL publication on how to use the

product in 101 ways (101 ACL Applications)• Has written and spoken on the use of audit data analytics for

over 15 years.• Received the Outstanding Achievement in Business Award by

the Association of Certified Fraud Examiners for developing the publication Proactively Detecting Fraud Using Computer Audit Reports as a research project for the IIA

• Recently was a contributing author of:• Global Technology Audit Guide (GTAG #13) Fraud in an

Automated World – Institute of Internal Auditors.• Data Analytics – A Practical Approach - research whitepaper

for the Information System Accountability Control Association.

• Cost Recovery – Turning Your Accounts Payable Department into a Profit Center – Wiley and Sons.

Please see full bio at www.richlanza.com

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Learning Objectives

Be able to map audit objectives in accounts payable, as an example audit area, to the specific test scripts to perform the task (sampling of these scripts are provided with the course).

Learn how to request data for your next review that will meet your reporting requirements.

See how to define Fixed field, Variable length, Excel, Delimited, Report files, and more in ACL.

Learn to use Statistics, Count and Total in your reporting results. Be able to utilize the Classify, Stratify, Age, Summarize, and Crosstab function Learn to complete gap and duplicate sequence tests and, more specifically, how

to complete a same, same, different duplication test in ACL. Understand how to Verify and Search databases for information, as well as,

extract needed information to a new file for analysis. Learn to Merge and Relate multiple tables, including steps to fixing data files

prior to merging them together. See how to use the JOIN function including effective many to many JOINs using

key words. Understand how to translate sampling theories to ACL commands. See record sampling in action (Random, Fixed Interval) and how to perform

Monetary Unit and stratified samples in ACL.

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Quick Process to Running Data

1. Know your audit objectives

2. Align reports to the objectives

3. Use past reports to model /refine reports

4. Set data requirements based on reports

5. Obtain, validate, and normalize data

6. Edit scripts for data needs

7. Run reports and document results

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Clear Data Request

Accounts Payable Data Request.doc

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Sample Data Validation – Accounts Payable Other Questions

Validation analysis can be programmed into the data normalization script to answer the below questions:

Statistical analysis should also be completed as part of the validation analysis Agreement to batch totals and sample data are critical

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Polling Question #1

What comes first in the data extraction process?Request data

Set objectives for the audit

Set report objectives

Validate data

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Data Import ExerciseUsing 101 ACL Application Data

Fixed Length File (Best for ACL)

Tab / CSV (Variable)

Excel (Variable)

Report (Multiple Record Fixed)

PDF Files

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Data Field Definition Flowchart for ACL

Is it a

date?

Do you add or

subtract the

field?

Define as a

date format

Define as a

numeric format

Yes

Yes

Define as a

character formatDefine as a

Print format

Are there any

decimal places?

Yes

No

No No

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Data Definition Wizard

It is not always right but can be easily fixed

Defining field lengths with a reasonable length

Defining overlapping fields

Set Date options

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Polling Question #2

What data table type is the easiest to define and use in ACL? Fixed length

Tab / CSV / Other Delimited

Excel

Access

Other

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The Basic Analyzers

Count

Total

Statistics

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Stratify Types

Stratify

Stratify Using a Break

Stratify to a Table

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Summarizing Data

Summarize

Use of Presort / Sort

Maximizing the

Other Fields

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Crosstab Data

Gain a column perspective

Similar to Pivots

Use Presort

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Polling Question #3

Which command should be preceded by a Sort or use a Presort command?Statistics

Stratify

Cross-tab

Age

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Gaps and Duplicates - Basics

Gap ranges and lists

DuplicateUse of the Sort/Presort

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The Data Menu

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Verify Command

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• Checks for data validity errors between the data type and the actual data in the table

• Useful to quickly identify data format issues

• Will consider blank spaces in dates to be issues

Search (Locate) and Seek

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• Search (LOCATE)• Can get to a record number quickly

• Can search files without them being indexed

• Known as the LOCATE command in ACL’s command language

• Seek• Only works on indexed record sets

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Extract (Append) and Merge

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• Extract IF • To obtain a reduced data set

• Extract Append• Combines files

• Resulting data file will not be sorted

• MergeResulting file will be sorted

Relate and Join Commands

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• Relate (DEFINE RELATION)• Fast to produce / Slower for later commands

• Great to quickly organize various tables into a data model

• 18 tables can be related at once

• Join• Produces a physically sorted/joined table

• Quick for later commands to execute on joined table

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Primary and Secondary Joins

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• Join This to Last Year Summarized Tables

• Use Primary AND Secondary

• Calculate the new Vendor Number Field using the Primary and Secondary table results

Seg_Duty FlowSegregation of Duties Test

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1. Join paid table to vendor table on vendor number Obtain the vendor create user name

2. Extract if vendor create user name is the same as the invoice create user name

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Polling Question #4

Which file technique leads to a physical file that is sorted? INDEX

RELATE

STRATIFY

JOIN

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When Items Don’t Match

Unmatched JoinSearches tables for unmatched situations

Primary records NOT in secondary table are exported

Useful to test for employees not on payroll or vendors not in payables tables

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Ven_Payr Flow –Vendor to Employee Match

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Create vendor and employee fields for matchingOnly address numbers – first 30 First 8 characters in address

Join files on calculated fields

Many to Many

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Primary Join Does Not Stop At First JoinSecondary Join Does Not Stop At First Join

All records of one table are matched to all records in other table….and vice versa

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Sampling TheoriesTranslating into ACL Commands

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What is Sampling?

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The practice of selecting individual items from a population to estimate

properties of that population…. given confidence levels around top error patterns and expected errors.

This is statistical sampling vs. judgmental (nonstatistical)

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Steps in Sampling

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1. Set Audit Procedure Objective2. Define the Attribute for TestingYes / NoValue over / under statement

3. Set the Population4. Select a Sampling Method5. Calculate Sample Size6. Audit the Sample7. Evaluate the Sample

Types of Sampling

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Attribute (Random, Fixed Interval, & Cell)

Monetary Unit / PPS

StratifiedBy amountBy transactional score

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Software Input Types

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Term Record / Attribute MUS / PPS

Population Number of Records Dollars in a Field

Confidence Confidence %Inverse is beta risk or risk of

incorrect acceptance

Confidence %Inverse is beta risk or risk of incorrect acceptance

Upper Error Limit Upper Error Rate % Tolerable Deviation Rate

Materiality / Tolerable Misstatement

Expected Total Errors

Error Rate % Error Value

Interval Record Interval Dollar Interval

Tolerable Errors # of Errors Maximum Tainting %

Inputs in ACL

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Sampling Size Example and Expectations

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We are 90% confident that the population error rate does not exceed the upper error limit of 5% with an expected error rate of 2%.

We need a samplesize of 134 with 3errors possible in the population of 4,999 to 500,000

Reducing Sample Sizes

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Increase Upper Error Limits

Reduce Confidence

Reduce Expected Error Rate / Number

Remove items that can’t or should not be tested (voids, canceled, no support)

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Size and Evaluation

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Sampling Books / Links

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ACL User Guide

Sampling: A Guide for Internal Auditors Barbara Apostolou, Ph.D., CPA

AU Section 350 http://www.aicpa.org/Research/Standards/AuditAttest/DownloadableDocuments/AU-0035theiia.org0.pdf

NYSSCPAhttp://www.nysscpa.org/cpajournal/2005/505/essentials/p36.htm

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Polling Question #5

What is the name of the upper error limit in a monetary unit sample?Population

Materiality

Upper Error %

Confidence

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Record SamplingRandom and Fixed interval Sampling

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ACL Random Sampling Thoughts

Cell is the combination of fixed interval and random sampling

Best to extract data prior to sampling to ensure population is properly set prior to sampling

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Polling Question #6

What sampling technique combines random and interval testing?Cell

Fixed Interval

Random

Portioned

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Questions?

Any Questions?Don’t be Shy!

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In the Queue

Using ACL Scripting in Your Next Audit (Basic/Intermediate Techniques) – May 15

Excel Pivot Tables and Graphing for Auditors – June 25

Building Simple Continuous Monitoring in ACL – July 2

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AuditSoftwareVideos.com

Videos accessible for FREE subscriptions

Repeat video and text instruction as much as you need

Sample files, scripts, and macros in ACL™, Excel™, etc. available for purchase

Bite-size video format (3 to 10 minutes)

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>> Professionally produced videos by instructors with over 20 years experience in ACL™, Excel™ , and more

Thank You!

Jim KaplanAuditNet LLC®1-800-385-1625Email:[email protected]://www.auditnet.org

Richard B. Lanza, CPA, CFE, CGMACash Recovery Partners, LLCPhone: 973-729-3944Cell: 201-650-4150Fax: 973-270-2428Email: [email protected]://www.richlanza.com

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