Session 3: Computer Assisted Audit Tools and Techniques (CAATTs)

1. Session 3: Computer Assisted Audit Tools and Techniques (CAATTs) Presented by: • Nancy Bennison Australian National University • Donna Webster Australian National University • Yoon-Jin Park Australian National University

2. Computer Assisted Audit Tools and Techniques Nancy Bennison Donna Webster Yoon-Jin Park

3. Presentation Overview • What are CAATTs? • Benefits • CAATTs at ANU • Case Studies • Lessons Learnt

4. What are CAATTs? • Computer Assisted Audit Tools and Techniques • The use of any computerised tool or technique which increases the efficiency and effectiveness of the audit function

5. Benefits Why are CAATTs useful? • Management of control deficiencies and risk; • Investigation of 100% data population; • Identifies business improvement opportunities; • Improves data integrity; • Fraud detection mechanism; and • Cost effective.

6. CAATTs at the ANU • ANU uses Audit Command Language (ACL) software • Program commenced January 2010 • Program focuses on 3 key areas to start with • Purchase to Pay Process (Vendors, Purchasing, Payment) • HR Processes (Payroll, Leave) • Management Requested (key account validation) • First year program designed to trial ACL tests; program is WIP • Reports provided to the Executive Director, Administration & Planning, CFO and the Audit & Risk Management Committee

7. CAATTs at the ANU

8. CAATTs at ANU • Example: Annual Program

9. CAATTs at ANU RMAO CONTINUOUS MONITORING PROGRAM June 2010 1. Objectives i. To analyse whether there is fraudulent amendment between purchase order and voucher information; and ii. To identify duplicate and split transactions. 2. Test Results Example: Monthly Report

10. Case Studies Case Study 1 – Payment Testing Objective: Identify duplicate payments to same vendors • Obtain vendor records and payment records for the relevant period. • Run ‘Duplicate’ on Invoice number, Invoice Date and Amount, then find transactions with same vendors with different ID.

11. Case Studies Case Study 2 – Expense Management (Purchase Card) Testing Objective: Look for double-dipping instances • Obtain HR Per Diem records and Purchase Card reports. • Run 'JOIN' on two files by a unique identifier 'Uni ID'. Add a column to show 'AGE (Pay calendar, Transaction date)'. Again, using a function tab, find AGE < 31. • Match travel allowance to meals purchased during same trip using purchase card

12. Lessons Learnt BusinessImprovementsArisingfromTesting • Cooperation with Vendor Maintenance team; • Data input errors (e.g. extra spaces, transposed numbers, input format); • Awareness about use of purchase cards (e.g. limits, appropriate purchases, timely acquittal); and • Awareness that we are now looking at a range of transactions.

13. Lessons Learnt Design • Limitations on data • Due care with confidential data • Share the plan with business units early Implementation • Time taken for data request / extraction • Further investigation required Reporting • Reporting and follow-up • Manage expectations of business units and Audit Committee

14. References

15. Thank you. Any questions?