2011-05-01
“ACL technology has fundamentally transformed how we manage spending and evaluate compliance. Reporting that was previously non-existent now provides senior leadership with a clear picture of our control environment.”
Hal Laughlin, Leader, IT Audit, Dun & Bradstreet
Dun & Bradstreet (D&B) is a leading source of commercial information and insight on businesses, with a global database of more than 140 million business records. Founded 167 years ago, the company now has over 100 locations in 35 countries and approximately 4,900 employees.
D&B runs its subsidiary and international business locations as autonomous operations, creating potential control issues that create a need for a complete continuous monitoring solution. The Internal Audit team implemented ACL technology to develop a standardised set of data analytics that equip business partners to monitor Accounts Payable (AP), Purchase Card (P-Card), Travel & Entertainment (T&E) and payroll transactions.
The team is highly enthusiastic about the solution’s AX™ Exception component, which enables stakeholders and managers to view and track anomalies and communicate seamlessly with business units. Previously, senior leadership could only access the occasional audit report to obtain clear feedback on control and compliance efforts. Therefore, centralised exception reporting was a key requirement for D&B in any automated monitoring solution.
The D&B audit team implemented a series of analytics to monitor T&E, P-Card, AP and payroll transactions. For example, one test reviews all invoices and transactions charged to D&B by a particular company or vendor. Another analytic examines all spending or billing submitted by a particular employee or cost centre. Both tests have quickly identified errors such as duplicate payments and fraudulent transactions.
Other analytics search invoice keywords to pinpoint inappropriate or unauthorised purchases. Testing T&E data in this manner, for example, revealed employees who were duplicating cash and credit card transactions to receive double reimbursements. The audit team also matches reimbursement claims against staff schedules to uncover employees logging expenses when they are officially on vacation.
D&B now has at least 30 analytics (with multiple testing layers) that run weekly. The Disbursements team – which reports both to the Chief Accounting Officer and Controller – oversee automated analytics that test global payroll, P-Card, AP, and T&E transactions, plus the vendor master file.
As the Disbursements team consolidates all global financial systems, the ACL solution will play an instrumental role in analysing high-volume transactions in a variety of different languages, currencies and IT environments. D&B has also leveraged business insights achieved through continuous monitoring to make several internal changes. For example, the company hired additional staff to specifically investigate identified exceptions.
The Compliance and Internal Audit teams now rely on ACL technology to quickly identify fraud or abuse of internal privileges. When analytics reveal a suspicious transaction, staff can immediately view historical data on a specific vendor or employee. Exceptions are tracked, assigned for investigation, and automatically routed to senior management for appropriate follow-up.
D&B has applied ACL technology to:
D&B has invested in a comprehensive continuous monitoring program powered by ACL technology. After implementation and testing, the Internal Audit team now transfers ownership of specific analytics to the appropriate business partners and process owners. Ultimately, these process owners are responsible for managing and monitoring their own transactional exceptions – giving the auditors greater autonomy to pursue significant control risks. This transfer of responsibility has also enhanced internal audit quality, thanks to a standardised approach underpinned by reliable analytic technology.
ACL’s innovative technology makes it simple to share anomalies, reports and track follow-up throughout this global organisation. D&B now has a single system of record to mitigate exceptions. The company has also worked with an ACL consultant to develop an aging report, which analyses how quickly team members resolve individual anomalies, while setting performance benchmarks.
D&B continues to refine its monitoring process to ensure appropriate exceptions are caught, investigated and resolved – without spending time on false positives or inconsequential anomalies. The Disbursements team, for example, uses preventative technology to ensure insignificant T&E exceptions are not even processed. ACL then pinpoints critical data anomalies, which are immediately reported to appropriate business process owners or managers.
Overall, D&B’s continuous monitoring solution has created a stronger control environment with an effective culture of audit compliance. Management, Internal Audit, and the Disbursements team are working together to promptly find and resolve exceptions, while using business insight to enhance key controls across the organisation. Board members have also been supportive of this proactive approach. The company continues to work with ACL consultants and trainers to expand their knowledge and enhance the analytics. Support is available whenever it’s needed, which ensures the monitoring solution provides timely, effective business assurance.
Moving forward, the Internal Audit team will use automated analytics to enhance AP controls in areas such as professional service transactions. They will also implement tighter requirements for purchase orders and invoices. Acquiring more detailed information up-front will strengthen the analytics to more effectively identify errors, abuse and fraud. The Compliance team is also developing analytics to ensure internal compliance with government regulations, including Sarbanes-Oxley and the Foreign Corrupt Practices Act.
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