Have you heard of the RADAR initiative? Conducted in partnership between the AICPA and Rutgers University, the Rutgers AICPA Data Analytics Research (RADAR) initiative has two main goals.
- Facilitate the further integration of data analytics into the audit process
- Demonstrate how this can effectively lead to advancements in the public accounting profession
Historically, when an auditor talked about using analytics in the audit, he/she typically meant selecting random samples or performing tests like searching for gaps or duplicates. Technology today, however, enables auditors to incorporate analytics throughout the entire audit workflow. This allows more complex regression analysis, and the added benefit of visualization.
Thanks to the RADAR initiative, auditors are reviewing both their data analytic tools and how they are incorporating analytics into their audit process. This is a good because data analytics enable auditors to improve in these areas:
- Testing complete sets of data versus testing only a sample
- Aiding the risk assessment process through identification of anomalies and trends and pointing auditors toward items they need to investigate further
- Providing audit evidence through comprehensive analysis of an organizations’ general ledger systems
Notably, an application like TeamMate Analytics is an example. It integrates analytics throughout the entire audit process, including:
- Accessing and cleansing of data
- Risk Assessment
- Test of Controls
- Substantive Analytical Procedures
- Test of Details
- Forming your overall conclusion
Additionally, access to data is key to performing data analytics. Therefore, selecting an analytic tool that provides access to data in an Excel format, or the ability to import to Excel, is equally important. Again, TeamMate Analytics is an example. Part of Wolters Kluwer’s Integrated Audit Approach, TeamMate Analytics imports data from PDF, CSV, or TXT files formats directly into Excel.
CCH Audit Accelerator
Moreover, use CCH Audit Accelerator in combination with TeamMate Analytics and you can connect directly to a client’s ERP system. Audit Accelerator, a cloud-based component of the Integrated Audit Approach, receives the client data via an upload and then immediately creates Excel workbooks full of information useful for analytics testing. Furthermore, drill down into the transaction level and you will eliminate a lot of back and forth with the client.
Similarly, the risk assessment phase also gains great value from analytic, including:
- Trend analysis of key financial statement balances, preliminary general ledger account balance analytics
- Visualization of key financial statement ratios
TeamMate Analytics offers two visualization capabilities:
- Quick visualizer tool – instantly create a visualization of any data set on the fly. Then embed the resulting chart as part of the workpaper, either as a PivotChart or basic Microsoft Chart.
- Advanced visualization – offers more control of the data included in the chart. Select chart type and subtype, as well as what each axis should include.
Regardless of your visualization choice, auditors now have a powerful tool to:
- Provide more consultative services to their clients
- Simply add graphical reviews of the client’s data to the audit workflow
Finally, another area of the workflow where TeamMate Analytics adds value is in test of controls. First, it is the perfect tool for selecting samples for test of controls, and for running complex tests like a three-way match of sales invoices, shipping documents, and a master price list. Second, you can then perform substantive analytical procedures using TeamMate Analytics. Third, additional tools within TeamMate Analytics enable the auditor to use predictive modules of amounts using regression analysis. Likewise, you could also create variance reports for the periods under audit.
CCH ProSystem fx Knowledge Coach
In addition, CCH ProSystem fx Knowledge Coach also assists in the assessment process. Starting with our Commercial 2018 title, tips are now included in the program step library – for steps that can be accomplished using TeamMate Analytics. This new feature will help simplify the process of integrating analytics into the audit.
In conclusion, once test of details begins, the auditor can take advantage of many functions within TeamMate Analytics. They can select samples using either random, monetary unit, attributes, systematic or stratified sampling methods. In addition to helping you through the process, it also goes a step further and selects the sample for you. It identifies unusual transactions such as outliers or transactions posted on days of the week where the customer is normally closed. You can even use TeamMate Analytics to recalculate a detailed aging schedule or perform Bedford’s testing of expenses and journals.
No matter where you are in the audit workflow, you will instantly add more value when you easily incorporate TeamMate Analytics into your processes. Visit our TeamMate Analytics webpage, and check out the video, to learn more.
TeamMate Analytics is an integral part of Wolters Kluwer’s Integrated Audit Approach. The Integrated Audit Approach seamlessly unites CCH Audit Accelerator, CCH ProSystem fx Engagement, TeamMate Analytics, CCH ProSystem fx Knowledge Coach, and CCH Accounting Research Manager. Additionally, it also leverages our School of Audit. This combination of solutions helps firms:
- Maximize realizations
- Increase audit quality
- Ensure peer review readiness
If you have not checked out these solutions and this approach, it is worth your time to do so. Consider attending a complimentary demo at a time that fits your schedule.
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