Continuous Auditing Process using Cross References and Key Performance Indicators

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Continuous Auditing Process using Cross
References and Key Performance Indicators

• Washington Lopes da Silva

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Agenda

1. Objective
2. Current Situation
3. Proposed Situation
4. Cross References
5. Key Performance Indicators
6. Conclusion
7. Recommendation

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Objectives
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Objectives

• To propose Improvements in the Continuous
  Auditing Process
• To reduce the number of false positives
• To facilitate the auditing analysis
• To provide a more intelligent Continuous Auditing
  routine
• To monitor the credit risks associated to clients
  with total negative balance

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Current Situation
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Current Situation

• Data extraction from the legacy systems is
  processed in the mainframe environment, using a
  special software to create reports (FOCUS)
• It reads the sequential files from the current
  account system
• Exceptions are analyzed, checked and sent by
  e-mail to the audited areas who are responsible
  for finding the proper solutions
• Exceptions can only be detected 5 days after they
  happen
• We can only define one parameter to capture the
  exceptions

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Proposed Situation
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Proposed Situation

• Data extraction from the legacy systems is
  processed in the Data Warehouse environment,
  using a new flexible IT architecture
• Creation of a Data Mart with clients credit
  information
• Creation of a cross reference between clients
  credit information and the current account
  system
• Reduction of the number of false positives as
  well as the time for auditing analysis
• Detection of exceptions only 1 day after they
  happen
• Definition of many parameters to make the cross
  reference and capture the exceptions
• Creation of Key Performance Indicators

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Cross Reference Parameters
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Cross References
Cross References
Credit System
Behaviour Scoring System
Renegotiation System
Investment System
CLIENTS NET BALANCE
Mortgage System
Current Account System
Cross References
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Key Performance Indicators
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Key Performance Indicators by branch
a) Excess amount b) The least, average, the
highest and total excess amount c) Excess index
/ Result d) Excess index / clean portfolio e)
Excess index / bad debts accrual f) Excess index
monthly growth (amounts and quantities) g)
Excess index / Limit h) Excess index / Excess
total loss (amounts) i) Excess index / total loss
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Conclusion
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Conclusion
The improvements of this new process will impact
tremendously the Continuous Auditing, bringing
up a) More effectiveness in controlling frauds
and financial losses b) Timeless of auditing
analysis c) Increase in the assertive auditing
actions through a more effective risk mapping d)
More independence to the auditors performance in
their analysis e) Increase in the confidence of
auditing data handling
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Recommendation
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Recommendation
Continuous Auditing Implementation process should
be spread all over the organization until
reaching all risk areas, as Accounting, Treasury,
Credit, and others where there is a possibility
of no compliance.
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Thank You!
Washington Lopes Washington.lopes_at_unibanco.com.br
16th World Continuous Auditing Symposium