Definition
An audit is the examination of various records of accounts/transactions by an auditor followed by an inspection of inventory to make sure that all departments are following a documented system of recording transactions. It is performed to ascertain the accuracy of financial statements generated by the organization.
Problem Scope/Need:
The auditing process is mandatory for all banks as per RBI guidelines. In India, chartered accountants from ICAI or The Institute of Chartered Accountants of India can do independent audits of any organization. CPA or Certified Public Accountant conducts audits in the USA.
All the public listed firms have to get their accounts audited by an independent auditor before they declare their results for any quarter.[1]
Generally, the audit is performed on all transaction data that branches and employees generate in their daily routine. Manually skimming through such a vast amount of data is not feasible as it takes a monumental amount of time and resources.
An audit can be performed internally by employees or heads of a particular department and externally by an outside firm or an independent auditor. The goal is to verify the accounts to ensure that all books of accounts are done fairly and there is no misrepresentation or detecting any fraud that is being conducted.
The audit team had to remain dependent on the business intelligence team (to form desired queries and statistical analysis) and the database team (for fetching desired data using the queries provided by business intelligence) for this process. This caused a lot of overhead waiting time in the grand scheme of the process.
SheetKraft’s Solution:
An automatic web-based application that not only performs internal audits periodically but also performs statistical analysis and e-mails audit reports in an official predefined format.
Interactive UI was designed and deployed for employees of the audit department to select dynamic inputs and generate audit reports at the click of a button.
The system scans millions of transactions/records from the database within a span of a few minutes. It also uses proprietary algorithms to detect anomalies and report them while also returning sample records to provide a bird’s-eye-view of the entire dataset to the user.
If a particular output report format is desired, it can be integrated within the system easily.
The final report (downloadable via a link sent in an e-mail to the intended user) is also reinforced with annexures and supporting information regarding the case-specific details which helps the auditors to verify the records and detect anomalies if any.
Time savings
For instance, the bank’s audit department used to fetch filter out the deviations from their database tables which store their generated data. The queries were being executed manually and the same was subsequently put into various reports after performing statistical analysis (using predefined scripts). These reports were circulated among the responsible teams once all the prerequisites were matched. This process usually overflowed the desired audit timeline.
SheetKraft’s solution combined the database fetch operations with statistical analysis and automatic report generation and e-mailing. The user would need to upload relevant queries in a master as a one-time activity and then the same queries could be modified at the click of a button when needed.
This automatic sampling and report generation resulted in a substantial increase in audit coverage for the bank and the audit activities can now stay on top of things instead of trailing behind.
The result of this endeavour has benefited in the form of soft savings of approximately 20 full-time employees
Links and references used:
http://www.mca.gov.in/MinistryV2/accounts+and+audit.html
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