▪ ▪ ▪ identify topics of interest ▪ perform impartial research ▪ circulate results on...

▪ www.ferf.org ▪

▪ identify topics of interest ▪ perform impartial research ▪ circulate results on financial topics ▪

Headquarters Office: 1250 Headquarters Plaza | West Tower, 7th Floor | Morristown, NJ 07960

Phone: 973.765.1000®

Slide 1

The Benefits ofContinuous Monitoring

Presented by

Michael Cangemi andBill Sinnett




Phone: 973.765.1000®

Slide 2

Agenda

Definitions Companies Company Initiatives Key Findings




Phone: 973.765.1000®

Slide 3

InteractionProviding local and international forums for connecting you with your peers;

InformationProviding you with insight to assist in informed business decisions;

FEI’S MISSIONFEI’s mission is to advance the success of senior-level financial executives, their organizations and the profession. Since 1931, FEI has been connecting members through:

InfluenceProviding authoritative representation for your interests;

Integrity Providing the tools to advance the profession through ethical leadership.




Phone: 973.765.1000®

Slide 4

Financial Executives Research Foundation (FERF) is the non-profit 501(c)(3) research affiliate of FEI. For more than 65 years FERF researchers identify key financial issues and develop impartial, timely

research reports for FEI members and non-members alike, in a variety of publication formats. The Foundation relies primarily on voluntary tax-deductible contributions from corporations, chapters, and

individuals.

Proceeds from purchases made through the

bookstore on the FEI website benefit FERF.

FERF Bookstore

www.ferf.org




Phone: 973.765.1000®

Slide 5

Finance & Information Technology NewsA quarterly electronic newsletter covering IT issues that affect financial executives.

IOU: Insights, Observations and Updates A quarterly e-newsletter offering members insights, observations and updates from K Street to Wall Street.

FEI Executive Edge Executive Edge is a monthly e-newsletter that will keep you up-to-date with events and development sessions offered by FEI.

FEI e-Newsletters

FEI Express (Public & Private) FEI Express is where members find out on a weekly basis the latest “scoop” on industry trends, regulatory updates, and technical issues. FEI members can subscribe to the public edition, the private edition, or both.




Phone: 973.765.1000®

Slide 6

Continuous Auditing

CA is an automated, ongoing process that enables internal audit to: Collect from processes, transactions, and accounts data that supports

internal and external auditing activities Achieve more timely, less costly compliance with policies, procedures,

and regulations Shift from cyclical or episodic reviews with limited focus to continuous,

broader, more proactive reviews Evolve from a traditional, static annual audit plan to a more dynamic plan

based on CA results




Phone: 973.765.1000®

Slide 7

Continuous Monitoring

CM is an automated, ongoing process that enables management to: Assess the effectiveness of controls and detect associated risk issues Improve business processes and activities while adhering to ethical and

compliance standards Execute more timely quantitative and qualitative risk-related decisions Increase the cost-effectiveness of controls and monitoring through IT

solutions




Phone: 973.765.1000®

Slide 8

Companies

American Electric Power Blue Cross/Blue Shield of North Carolina CME Group (Chicago Mercantile Exchange Group) Hallmark Cards (Privately-Held) Hewlett Packard IBM Intel Corporation




Phone: 973.765.1000®

Slide 9

Companies (Continued)

JC Penney Microsoft Corporation United Technologies Corporation Wells Fargo




Phone: 973.765.1000®

Slide 10

American Electric Power

CM Initiatives A/P uses Oversight Systems to monitor for duplicate payments Other CM efforts are defined by business process owners

Why They Do It Operational Effectiveness: Reduce Expenses

CM Enablers Oversight Systems




Phone: 973.765.1000®

Slide 11

Blue Cross/Blue Shield of North Carolina

CM Initiatives Audit has developed CAMP for use in three areas Claims monitoring, Medicare and A/P

Why They Do It Operational Efficiency: Detection of duplicate payments Compliance Effectiveness: Comply with Medicare

CM Enablers Continuous Auditing & Monitoring Program (CAMP) CAMP developed in-house by Audit




Phone: 973.765.1000®

Slide 12

CME Group

CM Initiatives Globex is used for surveillance of clearing firms and trades History Replay Injector (HRI) tests transaction controls Global Command Center diagnoses market anomalies

Why They Do It Compliance Effectiveness: CFTC (Globex) and SOX (HRI)

CM Enablers Globex, HRI and Global Command Center developed in-house by

Audit




Phone: 973.765.1000®

Slide 13

Hallmark Cards

CM Initiatives Check data quality and automate account reconciliations

Why They Do It Operational Efficiency Assure that key controls applied consistently Identify process pain points

CM Enablers Back Office Associates SAP GRC Blackline




Phone: 973.765.1000®

Slide 14

Hewlett Packard

CM Initiatives Monitor data from various perspectives to detect outliers

Why They Do It Operational Efficiency

CM Enablers Internal Audit has developed a set of tools to monitor data




Phone: 973.765.1000®

Slide 15

IBM

CM Initiatives Monitor expense reimbursement and procurement

Why They Do It Operational Efficiency To identify and remediate control deficiencies as they occur To provide continuous confirmation of control health To reduce need for manual testing

CM Enablers Risk Compliance and Analysis Tool (RCAT) developed by Internal

Audit




Phone: 973.765.1000®

Slide 16

Intel

CM Initiatives Global Accounts Payable Monitoring done by “Controls Group” of 10 FTEs

Why They Do It Operational Efficiency: Reduce expenses

CM Enablers Global Accounts Payable uses an internally developed program




Phone: 973.765.1000®

Slide 17

Microsoft

CM Initiatives Accounts Payable and Financial Close

Why They Do It Operational Efficiency: Reduce expenses Compliance Effectiveness: Provide transparency

CM Enablers Technology Enabled Continuous Audit (TECA) for A/P Controller Workspace for financial processes After the Fact samples controls on a monthly basis




Phone: 973.765.1000®

Slide 18

JC Penney

CM Initiatives The Audit Technology Group (ATG) uses a full suite of tools to

deliver Web applications Why They Do It

Audit assists management in addressing potential controls gaps and efficiency opportunities

CM Enablers STAR (Store Assessment Review) provides exception reports Inventory Management and Selling Strategy Measurements

monitors operation effectiveness




Phone: 973.765.1000®

Slide 19

United Technologies Corporation

CM Initiatives UTC’s Center of Excellence wants to eliminate duplicate

payments Why They Do It

Operational Efficiency: Reduce expenses CM Enablers

Oversight Systems UTC uses 4 out of possible 110 Integrity Checks offered by

Oversight




Phone: 973.765.1000®

Slide 20

Wells Fargo

CM Initiatives Community Banking monitors KRIs at “stores” Commercial Banking monitors KRIs at “offices”

Why They Do It Operational Efficiency: Reduce time and travel Compliance Effectiveness: Improve control environment

CM Enablers Community Banking Audit developed KRIs for “stores” Commercial Banking Audit developed Continuous Audit Program




Phone: 973.765.1000®

Slide 21

Key Findings

Companies recognize the importance of Continuous Monitoring CM initiatives require commitment of resources

Internal staff time Purchase of software tools

CM initiatives need a Champion at senior level Internal Audit is often the CM Champion There are many CM software tools available

▪ ▪ ▪ identify topics of interest ▪ perform impartial research ▪ circulate results on...

Documents

impartial research

headquarters plaza west

fei members

th floor morristown

key financial issues

level financial executives

bill sinnett slide

fei website benefit