Session from ACL Connections 2016 While most audit departments naturally focus more on their assurance services, this session will focus on how ACL can help elevate your department’s advisory services into what one day could be the epicenter of data analytics across your organization. In this dramatic presentation, an ACL customer shares their strategies, thought processes, speed-bumps, and successes as their department rose to been seen as the data analytics leaders in their organization. Are you ready to take the next step? Key learning outcomes: • Understand the value of having a trusted, dedicated, centralized data analytics group • Learn about real-world applications of how to use ACL to enhance your advisory services • Explore different strategies to becoming the data analytics epicenter for your organization

1. TURNING INTERNAL AUDIT INTO THE
DATA ANALYTICS EPICENTER FOR YOUR ORGANIZATION
Presenter: Heath Rude

2. Internal Audit Strategic Plan
•Satisfaction survey
score
•Audit requests
•Outreach activities
•Committee/task force
•PwC reliance on IA
PARTNERING
OBJECTIVES MEASURES
•Provide the best
customer service
possible
•Become a strategic
business partner &
trusted advisor
•Cost savings
•Use of technology to
enhance the audits
•Best practices &
process improvements
identified
PIONEERING
OBJECTIVES MEASURES
•Add value & improve
company operations
•Embrace the use of
new technology
•Stimulate positive
change
•Satisfaction survey
•Training hours/auditor
•Staff certifications
•Industry experience
•Audit experience
•Audit staff turnover
PEOPLE
OBJECTIVES MEASURES
•Develop skilled &
motivated individuals
into future company
leaders
•Be the employer of
choice in the industry
PROCESSES
•Audit performance
evaluation score
•Audit plan completion
%
•Budget vs. actual costs
•Report turnaround
OBJECTIVES MEASURES
•Provide independent,
objective assurance
and consulting
services in a
systematic, disciplined
approach
INTERNAL AUDIT
STRATEGY
CORPORATE
STRATEGY
• Leadership
• Professionalism
• Passion
• Happiness
• Vision
• Innovation
• Change
• Proactivity
• Independence &
Objectivity
• Integrity
• Efficiency &
Effectiveness
•Professional
Skepticism
• Trust
• Teamwork
• Unity
• Synergy
ADVISORY
ASSURANCE
Values
Values
Values
Values

3. Focus on the BONE!
Improve your organization through data analytics!
■ Take the Lead
■ Tactics
■ Obstacles
■ Real Examples
Become Sought-After
.

4. The Case for Internal Audit (IA) Taking The Lead

5. Assurance
Diversity
Exposure
Data Analytics

6. Assurance
Skillset Advisory
• Process Re-Engineering
• Facilitators
• Data Analytics

7. “That is not the role of IA.”

8. Internal auditing is an independent appraisal activity established
within an organization as a service to the organization.
-IIA Definition of IA in 1978
Internal auditing is an independent, objective assurance and
consulting activity designed to add value and improve an
organization’s operations.
- IIA Definition of IA from 1999 to today

9. Internal Audit credibility and value are enhanced when auditors are
proactive and their evaluations offer new insights and consider
future impact.
- 2016 Proposed Addition, Standard 2100

10. Aligns with the strategies, objectives, and risks of the organization.
Demonstrates quality and continuous improvement.
Communicates effectively.
Is insightful, proactive, and future-focused.
Promotes organizational improvement.

11. Advisory services is an
essential function of IA.

12. Tactic 1: Integration

13. 0
200
400
600
800
1000
1200
1400
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
New York State Violent Crime Rate
per 100,000 Population
Source: FBI, Uniform Crime Reports

14. For Daily Fantasy-Sports Operators, the Curse of too much Skill
In the first half of the 2015 MLB season, 91% of daily fantasy sports
player profits were won by just 1.3% of players
-Article by Ed Miller and Dan Singer, Sports Business Daily

15. How Companies Learn Your Secrets
My daughter got this in the mail!” he said. “She’s still in high school,
and you’re sending her coupons for baby clothes and cribs? Are you
trying to encourage her to get pregnant?”
-Article by Charles Duhigg, New York Times

17. Tactic 2: Timing is Everything

18. RED FLAG RULES
Are customers who they say they are?
■ Huge data set in multiple tables
■ Defined rules of applicability
■ The system handles it
■ Company expert

19. Customer Rates
Were customers accurately billed?
■ Several regulated tariffs
■ Monthly weather adjustor
■ Team to program and test
■ Over 100 pages of scripting

20. “They should not have access to that.”

21. IA needs
access to
data to do
their job.

22. Tactic 3: Market Yourself

23. Everythingyouwantedtoknowabout
audit,butweretooafraidtoask!

25. Planning
Fieldwork
Reporting
Follow
Up
The Audit Process

28. 2nd Line: Monitoring
1st Line: Performing
3rd Line: Auditing
Risks
The Three Lines of Defense

29. Revenue Protection
Has someone stolen gas?
■ Three lines of defense
■ Validate reports or triggers
■ Improve the process

30. Rate Change Report
Were changes properly entered into the system?
■ Many types of changes
■ Over 2,200 pages
■ 100% comparison
■ Temporary fix

31. Purchasing Card Committee
What card is best for our Company?
■ Spending habits
■ Vendor contract
■ Authorization levels and spending limits
■ System configurations
■ Dealing with outliers

32. Tactic 4: Win When You Fail

33. Fuel Purchases
Are fuel purchases legit and within policy?
■ Good procedures
■ Poor reports
■ No enforcement
■ Bad data

34. Tactic 5: Support Other Data Analytic Groups

35. “We cannot ask
them for help
because they must
maintain their
independence.”

36. IA can provide
assistance while
ensuring safeguards
are in place while
maintaining
independence.

37. Pipe Recall
What pipe needs to be replaced and when?
■ Trouble getting data
■ System change
■ Lay out assumptions
■ Prioritized by operational unit

38. “We’re hesitant to ask for help from
them because it may be used against
us.”

39. IA is a trusted advisor and a
valuable partner.

40. Remember the BONE!
Improve your organization through data analytics!
Build your strategy:
■ Integration
■ Timing is Everything
■ Market Yourself
■ Win When You Fail
■ Support Other Data Analytic Groups
Become Sought-After

41. THANK YOU
CONTACT ME AT HEATH.RUDE@SWGAS.COM