“We wanted to be proactive about reviewing critical financial areas across the company. Our ACL solution has helped us to achieve that goal.”
A New York based Pharmaceutical company that discovers, develops, and commercialises medicines to treat serious medical conditions. The company has over 1,500 employees across corporate headquarters and research laboratories. As well as a large-scale biologics manufacturing facility where it produces commercial and investigational products for clinical trials.
The company has grown from 500 to over 1,500 employees in the last two years – and expects to add several hundred more staff in the near future. However, with this kind of rapid corporate growth also comes greater risk that exceptions, errors or fraud will go undetected in the vast quantities of new data created.
To prevent this, the three-member Internal Audit (IA) team wanted to move from manual processes to full-population data analysis to examine key financial transactions. Manually testing internal controls was quickly becoming unmanageable, so IA needed an automated solution that provided 100% data coverage.
After examining several solution providers, the department chose to implement ACL technology. They began by identifying high-risk Accounts Payable (AP), General Ledger, Travel and Entertainment, payroll, and Purchase Card (P-Cards) transactions. Working with an on-site ACL consultant, they implemented 40 analytics that access and test data directly from the corporate financial system.
For example, to ensure compliance with corporate P-Card policies, ACL analytics target payments that exceed specific dollar thresholds, single transaction limits, and monthly transaction limits. Other tests look for split payments and inefficient small dollar purchases. These analytics immediately demonstrated the value of automated 100% data coverage, and have inspired testing in additional areas.
Other tests investigate AP transactions to find duplicate vendors, duplicate invoices, and other errors and anomalies. While the analytics will occasionally reveal problematic transactions, auditors are assured that internal checks and balances are working well. At the same time, the technology demonstrates that reliable processes are in place to monitor controls and quickly uncover errors and fraudulent activities.
This pharmaceuticals company applied ACL technology to:
The Internal Audit team has used the flexible ACL solution to eliminate time-consuming manual processes that often miss exceptions. With tailored analytics, the team can provide assurance to senior management that internal controls are working effectively to prevent loss and minimise financial risk.
Automated, full-population data analysis gives auditors more time to pursue value-added activities. For example, the ACL consultant developed an analytic that uses dollar thresholds to pinpoint inappropriate purchase orders. Previously, this was a daylong process that required manual analysis with spreadsheet software. Now, auditors can manipulate total thresholds and perform this test in several minutes – with 100% data coverage. The testing saves time and money, while enhancing a culture of compliance throughout the company.
For this small audit team, getting up to speed quickly was critical. The experienced ACL consultant provided training, helped to develop and implement tailored analytics, and ensured the tests delivered the desired results. He provided sound coding logic and adjusted the analytics to match the company’s existing IT infrastructure. He also ensured the team was comfortable using and expanding the technology on their own. The company’s IT Auditor commented, “I would highly recommend ACL consulting. The team is professional, efficient, and ensures the technology fits your needs and produces results as quickly as possible.” Furthermore, the auditors can rely on ACL Support Services to resolve ongoing issues and questions – whenever and however they need help.
Ultimately, the ACL implementation was a smooth, thorough process that has equipped the audit team to deliver significant value back to the company. The automated analytics provide full visibility into critical data, while freeing staff to focus on higher-risk transactions. Complete data testing can now identify inconsistencies that may have been overlooked in the past.
This pharmaceuticals company has applied the ACL solution to reduce manual processes, while increasing efficiency and audit scope. Audit leaders are also eager to transform the department from a cost center to a value-added center – and ACL technology will play a significant role in that evolution.