It is becoming more

difficult for management

to gain effective oversight

of processes and controls –

especially in finance and

accounting – because they

are increasingly complex.

Pressure on costs and

growing regulatory

requirements add further

strain. We help clients to

improve their controls and

process oversight by

applying highly sophisticated

data analysis and control

automation techniques.

Clients gain greater com-

fort over the efficiency and

effectiveness of individual

controls, and over the

control port folio in its

entirety. They can reduce

their cost of control and

ensure sustainable,

continuous monitoring.

Companies have developed their internal monitoring activities to reduce management liability, strengthen process oversight and meet increasing governance requirements. This is particularly the case in the realm of finance and accounting. However, these activities are reaching the limits of their efficiency and effectiveness. In business areas such as customer-relationship management, manufacturing and quality control, forward- looking companies have long used advanced data analysis and control techniques to improve key processes and generate valuable management insights about control effectiveness and efficiency. There is great – yet often untapped – potential to apply these methods to finance and accounting activities and related processes.

Financial Accounting Advisory Services Advanced process

assurance and data analyticsUsing innovative control methods and analytics to transform financial process assurance

Common signs that data analytics and control automation could deliver increased assurance in finance- and accounting-related processes include:

• A full-scope manual control of all critical transactions on a company-wide basis is, realistically, not possible

• Controls to be tested are chosen at random, limiting process assurance

• Data and information for oversight tasks is often provided manually

• Data is fragmented across various IT systems, hampering efficient control monitoring

• Internal monitoring functions (e.g. internal audit) cannot cover all relevant processes

• Uncertainty about the financial statement audit and its control-testing results

We can apply advanced analytics and control automation techniques to your finance- related processes, using data from across your IT systems and transactions to monitor the key risks of critical activities.

This will enable your process, control owners and management to continuously monitor your critical controls and transactions. As a result, your process oversight and your overall control environment can be streamlined, reducing the cost of monitoring and realizing significant efficiency and effectiveness enhancements.

Working with you to address your finance-related monitoring and control challenges

Cri

tical

p

rocesses

Data

Monitoring

Control m

etho

ds

Critical processesOptimizing control and analysis procedures for essential and critical processes

Implementing better controls and streamlining process oversight is a four-stage process

DataConsidering large transaction and data volumes for process monitoring

MonitoringEstablishing real-time reporting for control processes

Control methodsAutomation of control methods and usage of data analytics

The four stages of our solution to help you generate value from your process monitoring are:

Control analysis in critical processesWe will conduct a process and risk analysis to assess the current state and to define a future-state vision for your monitoring approach and control methods. We will analyze individual controls to determine their automation potential and review the whole control portfolio to identify where data analytics can provide improvements.

Large-volume data processesWe will select and analyze underlying data from your IT systems. Data is extracted, transformed and loaded to be incorporated into the next step of advanced control procedures.

Advanced control methods appliedWe will apply innovative data analytics to simplify financial oversight analysis (see box) and use advanced automation techniques to replace manual procedures. Both improvements lead to higher assurance via increased transaction coverage and real-time issue identification.

Implementing continuous reportingWe will implement an IT-based workflow to track findings and enable process owners to constantly monitor control performance through a real-time reporting dashboard.

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1. 2.

3. 4.

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Advancedprocess assuranceand data analysis

4 | Document title Additional text

Applying advanced analytics techniques

Dat

a co

llect

or

• Compares the time-expectation corridor with the time-performance graph via pattern matching and stochastic methods

Control portfolio analyzer

Time

Moment

Balance sheet items

Val

ue

Current data calculator

• Collects actual data in the defined dimensions and calculates respective values

• Measures the performance over time

Balance sheet item 1

Val

ue

Time

Balance sheet item n

Val

ue

Time

Expectation space calculator

• Generates expected values in multiple dimensions (e.g. P&L items, product, value, time)

• Calculates the expectation corridor over time

Balance sheet item 1 Balance sheet item n

Val

ue

Time

Val

ue

Time

We can use advanced mathematical analysis techniques – e.g. stochastic modeling – to create an “expectations space” for your financial and accounting data. For example, we can combine multiple financial statement positions and connect related journal entries. This expectation space gives us a benchmark that we can compare against your actual data. We can then perform a highly sophisticated analysis of your business data, identifying potential errors and problems that would otherwise likely go unnoticed.

How we can help you derive additional value from your controls

Our service

• Establishes analytical methods (e.g. data analytics, stochastic and other statistical methods) to streamline the control portfolio

• Designs, develops and implements automated controls to reach efficiency gains and to enhances assurance simultaneously

• Analyzes critical processes and risks to streamline control performance and oversight

• Sets up real-time reporting dashboards to provide constant process monitoring capabilities for process owners and management

• Provides implementation support through a number of flexible and reliable in-house developed tools

• Provides support in applying existing or commercial software for the advanced process assurance methodology

Your benefit

• Increased assurance for financial and accounting related processes

• Reliable, forward-looking process monitoring and efficient tracking of strategic goals

• Strategic success factors aligned with process oversight

• Cost reduction of control performance and increased coverage of critical transactions

• Streamlined control portfolio and optimized cost-benefit ratio for control procedures

• Sustainable and systematic monitoring of control-effectiveness

• Efficiency and quality improvements of internal audit work

• Enhanced quality of process monitoring information

• Reliable and efficient reporting of control-effectiveness for oversight by management and board

• Greater comfort over individual controls and the entire control portfolio

“Organizations neglecting advanced control methods are wasting resources. Leading companies reach efficiency improvements by constantly considering advanced process assurance techniques.”

Working with you to improve oversight

Advanced control methods and data analytics can significantly improve an organization’s control environment by shifting the focus from manual isolated control monitoring towards a more holistic and comprehensive approach.

We can help you to make monitoring of controls and their effectiveness an efficient activity for all process stakeholders. To secure long-lasting project success, we apply our global project management methodology (IDDDS framework), including change management techniques.

EY’s Advanced Process Assurance and Data Analytics team has carried out a range of successful projects, working with multinational organizations as well as small and medium-sized companies.

We have supported the improvement of our clients’ process-monitoring capabilities, control automation and streamlining, control portfolio optimization and management oversight.

Our teams have extensive experience in the following areas:

• Finance, accounting and underlying processes

• Evaluation of risks and processes

• Analysis, implementation and redesign of control environments

• Establishment and optimization of rule- and data-based control automation

• Data extraction, structuring and processing

• Sophisticated data analytic methods

• Application of stochastic analytics

• Design and implementation of reporting dashboards

• Setup and implementation of IT-based workflows

• ERP software and software-selection processes

If you discover one or more of the following characteristics in your processes, an advanced process assurance and data analytics component might boost efficiency and effectiveness of your monitoring tasks:

High transaction frequency in critical processes

Time gaps between transaction and control

High amount of manual control activities

Unsystematic identification of process issues and transaction failures

Increased effort needed for process oversight or to provide information to management

High degree of uncertainty about the year-end findings

Doubts about the efficiency of the control environment

Quick check

Contacts

Detmar OrdemannAdvanced process assurance and data analyticsdetmar.ordemann@de.ey.com+ 49 711 9881 15438

Marc GrötznerAdvanced process assurance and data analyticsmarc.groetzner@de.ey.com + 49 211 9352 16279

EY | Assurance | Tax | Transactions | Advisory

About EYEY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

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This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.

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