Pamela McCoy, CPA, CIA, CISA Senior Product Manager TeamMate Product Development Team October 9, 2003

1. 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

2. 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

3. Paperless Audits – What? Any audit that is electronically planned, documented, indexed, referenced, reviewed, reported, and stored.

4. 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

5. 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?

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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?”