Spotlight on Audit

The audit profession is faced with a myriad of challenges due to financial reporting requirements, pressure to
reduce costs, and difficult to access data sources. Self-service data preparation solutions are now essential to
streamline the audit process, to ensure compliance and reduce non-billable hours for auditors. Below are examples
and testimonials from auditors about how they save time and money completing their audits, all the while accessing
critical data and identifying issues faster and more efficiently.

Approaches to Achieve  prior to and during audits. This is because

Challenges to Audit
Effectiveness
Lowering audit expenditures has
led to:
• Less preparation time
• Poorer data quality
• Less time testing and evidence
gathering
• Less experienced audit staff
many auditors have no direct access to data
Cost-Effective Audits
sources across the organization. According
These challenges can be addressed with to a survey sponsored by Altair Corporation,
better data access and better data usage in nearly all (97%) respondents reported they
the audit process. Using the right approach, must work with data from multiple sources*
auditors can: including:
• Have timely access to data
• Excel 77%
• Detect anomalies, fraud and trends across
comprehensive data sets • Databases 54.3%
• Minimize direct IT involvement • ERP systems 42.9%
Savvy auditors have discovered that self-
• Accounting and General
service data preparation is key to ensuring
Ledger applications 77.1%
timely, trustworthy and comprehensive audits
with minimal IT involvement. • Mainframe and legacy systems 5.7%
• Network files 14.3%
Timely Access to Data in Respondents also stated that they must work
the Right Form with data in unstructured, structured and
Auditors often say they spend too much time semi-structured formats such as PDF, flat files
working with data instead of analyzing it, both and others.

Learn more:
altair.com/knowledgeworks
* Due to the need to use multiple data
sources, the numbers add up to more
than 100%.
How It Is Done
Altair’s platform simplifies data preparation
for external and internal auditors across all
data sources. Turning days into hours, or
even minutes to complete auditing tasks
leads to tangible cost savings.
“Tax and accounting managers
seeking a simple, self-
service solution to access and
manipulate data within reports,
spreadsheets, databases, and
other sources should give Altair
a close look. Altair has proven
itself to be a very valuable tool
in helping us effectively fulfill
our clients’ sales and use tax
return filing needs.”
COMPLIANCE ANALYST,
CONSULTING FIRM
Consulting and Audit firms use
Altair® Monarch® to:
• Gain direct access to mainframe and
server d ata for loading into a custom audit
software package
• Combine mainframe and server data with
data from past reports covering account
balances, transactions and ratios
• Transform current and historical data,
trapped in reports, into live data
• Gain better access to and leverage of a
bank’s library o
 f mission-critical reports,
whether from a transaction processing
service bureau or a document and report
storage system
• Extract information from loan records
and load the data into an Excel template
to identify various factors and build a
comprehensive loan review, t urning a three
to four day data gathering task into one hour
Leading Tax Audit Firm
A leading tax audit firm providing property
tax, sales/use tax and state income tax
consulting services, with more than 230
employees and offices across the U.S. and
Canada needed to know they were working
with the correct tax related data for audits
to ensure their clients had not overpaid their
tax obligation.
The firm, like many other firms c onducting
audits, struggled with:
• Finding an easy, efficient and cost-effective
way to work with clients’ existing reports,
particularly their accounts payable reports
• Programming-free access to clients’ 1,000
- 1,500 sales and use return tax filings
per year
• Combining data from multiple data sources,
including sales reports from accounting sys-
tems, customer sales tax charges from ERP
applications, accrued use tax liability reports
and even sales and use tax information
maintained in an Excel spreadsheet
With Altair’s self-service data
preparation, the firm was able to:
• Easily transform clients’ existing accounts
payable reports into live data for fast anal-
ysis, which dramatically expedites the sales
tax audit and review process, as well as the
recovery of overpayments
• Export sales and use tax data in the correct
format for Insource, the firm’s automated
tax preparation software
Increase Trust In Data
Often data used by auditors is from
secondary sources such as Excel, semi-
structured data or data from custom inhouse
systems. Data in these formats almost always
originates in another system and is either
exported to or entered into Excel manually.
Questions about data lineage and accuracy
are often raised because of this.
“Our audit procedures
include a range of analytical
techniques that require us to
capture financial data from
our clients. With older and
bespoke (custom) systems,
the main means of extracting
information is in printed
reports. By facilitating the
capture of information, we
could perform our procedures
more efficiently, allowing us to
provide greater insight, value
and quality to our clients.”
SENIOR MANAGER, E-AUDIT GROUP,
ONE OF THE TOP 10 GLOBAL AUDIT FIRMS
How It Is Done
The Altair platform turns Excel, semi-
structured and custom-report based data into
trustworthy, audit-friendly data. This is key to
helping auditors manage risk. A large credit
union, serving more than 102,000 members,
was challenged with understanding, analyzing
and auditing their loan portfolio.
This credit union wanted to ensure they had
the right, trusted data for a wide variety of
internal auditing projects, which includes
analyzing actual versus expected risk
levels for loans, and measuring the work
performance of the internal audit
department itself.
Loan portfolio review is their most important
auditing project. The organization is very
active in car loans to its members, home
equity lines of credit, credit cards, business
loans and more. The executive management
of the credit union wanted greater visibility
into this aspect of the business in order to
proactively manage its loan portfolio.To do
this, the credit union needed to:
• Easily access and work with loan origination
reports from Symitar without the need to
turn to costly IT resources
• Access this data without using complex
database tools or a report writer
• Eliminate the costly and wasteful process of
printing voluminous Symitar reports to get
at the data
For its internal audit activities, the credit
union needed to:
• Expedite the workflow of internal
audit activity
• Reduce the amount of loan files with
missing, erroneous or noncompliant data
• Eliminate the backlog of internal audit work
tymied by bad data
With Monarch, the credit union now has
far greater insight into its loan business and
increased performance from its internal audit
process. The team is now able to:
• Mine and customize data coming directly
from Symitar
• Mine loan origination reports from historical
Symitar reports
• Transform the data into a data table,
enabling the credit union to sort and filter
data, and add new calculations as needed
• Stratify the data with subtotals and grand
totals that include many levels of detail
• Create Excel-based summaries of the top
ten auto dealers and top ten in-house
loan products
“Banks and other organizations typically look to traditional audit software to analyze data for
internal auditing. Our bank has such audit software as well. But all too often, these software
packages prove to be very difficult to use on an everyday basis. Traditional audit packages
tend to be database-focused and cannot access some of the data [we need].”
AUDITOR, COMMERCIAL BANK
• Build reports that use empirical, trusted data
that show which loan groups were riskier
than expected, and assess the level of loan
charge-offs by auto dealer to identify loan
quality problems
• Audit 100% of loans processed by the Loan
Center more efficiently and cost effectively
• Create scorecards on the performance of
the internal audit team by mining data from
Symitar to compare the number of loans
funded each day with the number of loan
agreements audited – generating a trending
analysis showing the number of days
between loan approval and the completion
of the internal audit of that loan
“It is critical to our credit union’s
success to proactively manage
the actual risk of our loan
portfolio, and manage the
everyday performance and
workflow of our internal audit
department, with the best
possible information available.”
AVP FOR A LARGE CREDIT UNION
• Mine Symitar log files showing all corrections
to loan data entered by each internal auditor
into the Symitar database to analyze errors
by loan and by loan officer over time
Detect Anomalies,
Fraud and Trends Across
Comprehensive Data
A major opportunity to improve audit
effectiveness lies in the auditor’s ability to
discover trends in the data. More than 66%
of auditors state they do not have the ability
to identify trends. This is due to the inability
of people using spreadsheet tools to handle
checks across datasets with millions of lines
and rows.
How It Is Done
Altair’s self-service data preparation solution
provides comprehensive data assessments
including thousands of report pages and large
data - scalable up to millions of lines and rows
-and across multiple data sets. This allows
auditors to build report “models,” or custom
data assembly rules for later reuse by others.
Models mine data from key specialized
reports, such as Past Due Loans, Overdrafts,
Dormant Accounts and more, matching the
data from those reports with data from other
all-encompassing reports.
Finally, a system like this allows users to
perform additional calculations and analyses
on the mined data and export it
to Excel as needed.
A full-service commercial bank with 36
banking offices and over $1.6 billion in
assets has a strong commitment to providing
“friendly, old-fashioned service.” The bank’s
internal audit function has gone beyond
“business as usual” audit software solutions
to meet its internal audit needs.
Like many banks, this bank uses a third-
party data processing firm for its banking
operations. The data processing firm offers
several hundred r eports for every aspect
of banking operations. T he bank ruled out
printing these reports because t hey are
thousands of pages each.
To make the audit process more efficient, t he
bank needed to:
• Customize the reports to enable sorting for
specific items, without having to pay more to
the data processing firm
• Avoid using overly complex approaches that
require a lot of training – such as
database-focused solutions or report
writing systems
• Have an easy and quick-to-deploy solution
that provided access to the required data.
With Monarch, this bank has met all its n
 eeds
and has:
• The ability to open report files for 100 “must
have” reports received from the data pro-
cessing firm on a regular basis
• An easy-to-create report model to extract
that vital data
• An efficient approach to analyzing and
summarizing data, which can then export
to Excel anytime — whether on a regular
or on an ad-hoc basis
• A method to incorporate and analyze data
from multiple instances of the same report
together in one session
• An easy and intuitive way to join data from a
report with data in databases and files
• The ability to transform a wide variety of
reports, including Trial Balance for Loans,
Overdraft Reports and Kiting Suspect
Reports, into usable data needed to help
effectively manage the bank’s operations,
identify discrepancies and pinpoint possible
fraudulent transactions
A privately held global specialty manufacturer
of machine parts needed to make its auditing
activities run like a well-oiled machine. Like
many organizations, this manufacturer must
fulfill certain anti-fraud auditing requirements
and adhere to numerous auditing standards.
The manufacturer was faced with a number
of challenges:
• An inability to quickly and easily analyze data
from reports produced by the company’s
ERP system
• Print thousands of report pages annually
to satisfy requests for information from
external auditors
• Find an alternative to querying the ERP
system database to more accurately pick up
specific database tables needed to match
the totals
• Avoid “reinventing the wheel” in accessing
the ERP aging and inventory reports
“Altair really came to the • Minimizes audit process disruption, s aving
time and money
rescue to dramatically • Promotes transparency and audit
simplify our annual audit, effectiveness
as well as general accounting
How It Is Done
processes. We use Altair on The Altair Platform provides direct access to
a regular basis to ensure our data throughout the organization, allowing it
to be assembled on-the-fly using easy to learn
manufacturing and inventory and shared rules or “models.” This increases
management is running at the trust, and allows for comprehensive testing to
most efficient and profitable spot anomalies, fraud and trends.
level possible.” Conclusions
Thousands of auditors worldwide have a
VP OF FINANCE secret weapon for achieving lower cost
audits without sacrificing effectiveness: they
After deploying Monarch, t he manufacturer
use the Monarch solution. This easy-to-use
and its auditors:
technology allows auditors like you to do
• Can mine data in reports and also data
much more with fewer resources, while
about the reports
maintaining or increasing quality results.
• Mine data and time stamps from accounting
month-end reports, providing auditors
A tremendous opportunity exists in
a “snapshot” of data as they close the
improving how existing data is accessed
company’s books
and utilized in the audit to provide timely
• Eliminate the need to go directly into
access to data in the right form - cutting prep
the raw t ransaction databases and “roll
time, while increasing data accuracy, and
back” all transactions since the accounting
detecting anomalies, fraud and trends across
closing date
comprehensive data sets - with minimal direct
• Have full confidence they have 100%
IT involvement.
reliability in their accounting data
Minimal Direct IT Involvement
Among auditors surveyed, 19.4% stated they
previously required custom programming
from IT t o perform their audits. Nearly 40%
had stated gaining access to the data they
need is a significant challenge. However, using
a self-service data prep solution:

“Many of our banking reports have calculations that don’t exist in the underlying database. These
calculations are part of the report itself. For example, our Trial Balance for Deposits report contains
some 75 different fields of data. Many of the data fields in the report are calculated only when the
report is run. The calculated data fields are critical: interest rate, account type, interest calculating,
accrued interest to date, daily accrual and more. All this data appears on the report output
itself, but nowhere in the database. With a data preparation platform, we can capture all of this
calculated data off the report easily. All 11,000 pages from the Trial Balances for Deposits report
with a 100% guaranteed accurate dataset.”
AUDITOR, COMMERCIAL BANK

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