How Internal Auditors can win The War against Spreadsheet Fraud

To prevent another round of million dollar scandals due to fraudulent manipulations on spreadsheets, regulatory bodies have launched major offensives against these well-loved User Developed Applications (UDAs). Naturally, internal auditors are front and center in carrying out these offensives.

While regulations like the Sarbanes-Oxley Act, Dodd-Frank Act, and Solvency II can only be effective if end users are able to carry out the activities and practices required of them, auditors need to ascertain that they have. Sad to say, when it comes to spreadsheets, that is easier said than done.

Because spreadsheets are loosely distributed by nature, internal auditors always find it hard to: locate them, identify ownership, and trace their relationships with other spreadsheets. Now, we’re still talking about naturally occurring spreadsheets. How much more with files that have been deliberately tampered?

Spreadsheets can be altered in a variety of ways, especially if the purpose is to conceal fraudulent activities. Fraudsters can, for instance:

  • hide columns or rows,
  • perform conditional formatting, which changes the appearance of cells depending on certain values
  • replace cell entries with false values either through direct input or by linking to other spreadsheet sources
  • apply small, incremental changes in multiple cells or even spreadsheets to avoid detection
  • design macros and user defined functions to carry out fraudulent manipulations automatically

Recognising the seemingly insurmountable task ahead, the Institute of Internal Auditors released a guide designed specifically for the task of auditing user-developed applications, which of course includes spreadsheets.

But is this really the weapon internal auditors should be wielding in their quest to bring down spreadsheet fraud? Our answer is no. In fact, we believe no such weapon has to be wielded at all?because the only way to get rid of spreadsheet fraud is to eliminate spreadsheets once and for all.

Imagine how easy it would be for internal auditors to conduct their audits if data were kept in a centralised server instead of being scattered throughout the organisation in end-user hard drives.

And that’s not all. Because a server-based solution can be configured to have its own built-in controls, all your data will be under lock and key; unlike spreadsheet-based systems wherein storing a spreadsheet file inside a password-protected workstation does not guarantee equal security for all the other spreadsheets scattered throughout your company.

Learn more about Denizon’s server application solutions and discover a more efficient way for your internal auditors to carry out their jobs.

More Spreadsheet Blogs

 

Spreadsheet Risks in Banks

 

Top 10 Disadvantages of Spreadsheets

 

Disadvantages of Spreadsheets – obstacles to compliance in the Healthcare Industry

 

How Internal Auditors can win the War against Spreadsheet Fraud

 

Spreadsheet Reporting – No Room in your company in an age of Business Intelligence

 

Still looking for a Way to Consolidate Excel Spreadsheets?

 

Disadvantages of Spreadsheets

 

Spreadsheet woes – ill equipped for an Agile Business Environment

 

Spreadsheet Fraud

 

Spreadsheet Woes – Limited features for easy adoption of a control framework

 

Spreadsheet woes – Burden in SOX Compliance and other Regulations

 

Spreadsheet Risk Issues

 

Server Application Solutions – Don’t let Spreadsheets hold your Business back

 

Why Spreadsheets can send the pillars of Solvency II crashing down

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Operational Reviews

IT OPERATIONAL REVIEWS DEFINED
An IT operational review is an in-depth and objective review of an entire organisation or a specific segment of that organisation. It can be used to identify and address existing concerns within your company such as communication issues between departments, problems with customer relations, operating procedures, lack of profitability issues, and other factors that affect the stability of the business.
Operational reviews allow the organisation members to evaluate how well they are performing, given that they perform appropriately according to the procedures set by them, allocating their resources properly, and performing such tasks within time frame set and using cost-effective measures. More importantly, it also shows your company how well it is prepared to meet future challenges.
Simply put, the goals of an operational review are to increase revenue, improve market share, and reduce cost.

THE BENEFITS OF AN IT OPERATIONAL REVIEW
The main objective of IT operational reviews is to help organisations like yours learn how to deal with and address issues, instead of simply reacting to the challenges brought about by growth and change.
In such review, the information provided is practical from both a financial and operational perspective. Using these data, the management can then come up with recommendations, which are not only realistic, but more importantly, can help the organisation achieve its goals. The review recognises the extent to which your internal controls actually work, and enables you to identify and understand your strengths, weaknesses, opportunities and threats

To be more specific, let’s list down the ways wherein an effective operational review can contribute to the success of the organisation.

The review process can:
– assess compliance within your own organisational objectives, policies and procedures;
– evaluate specific company operations independently and objectively;
– give an impartial assessment regarding the effectiveness of an organisation’s control systems;
– identify the appropriate standards for quantifying achievement of organisational objectives;
– evaluate the reliability and value of the company?s management data and reports;
– pinpoint problem areas and their underlying causes;
– give rise to opportunities that may increase profit, augment revenue, and reduce costs without sacrificing the quality of the product or service.
Thus, each operational review conducted is unique, and can be holistic or specific to the activities of one department.

Our Operational Efficiencies cover the entire spectrum:

  • What to buy
  • Optimising what you’ve already bought e.g. underutilised servers, duplicate processes, poorly managed bandwidths
  • Making your team comfortable with the changes
  • Instilling Best Practices

UNCOVER WAYS TO DRIVE YOUR PROFITS UP, THROUGH OPERATIONAL REVIEWS

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Carrying out an Operational Review


Operational Reviews


Operational Efficiency Initiatives


Operational Review Defined

Finding the Best Structure for Your Enterprise Development Team

An enterprise development team is a small group of dedicated specialists. They may focus on a new business project such as an IoT solution. Members of microteams cooperate with ideas while functioning semi-independently. These self-managing specialists are scarce in the job market. Thus, they are a relatively expensive resource and we must optimise their role.

Organisation?Size and Enterprise Development Team Structure

Organisation structure depends on the size of the business and the industry in which it functions. An enterprise development team for a micro business may be a few freelancers burning candles at both ends. While a large corporate may have a herd of full-timers with their own building. Most IoT solutions are born out of the efforts of microteams.

In this regard, Bill Gates and Mark Zuckerberg blazed the trail with Microsoft and Facebook. They were both college students at the time, and both abandoned their business studies to follow their dreams. There is a strong case for liberating developers from top-down structures, and keeping management and initiative at arm?s length.

The Case for Separating Microteams from the?Organisation

Microsoft Corporation went on to become a massive corporate, with 114,000 employees, and its founder Bill Gates arguably one of the richest people in the world. Yet even it admits there are limitations to size. In Chapter 2 of its Visual Studio 6.0 program it says,

‘today’s component-based enterprise applications are different from traditional business applications in many ways. To build them successfully, you need not only new programming tools and architectures, but also new development and project management strategies.?

Microsoft goes on to confirm that traditional, top-down structures are inappropriate for component-based systems such as IoT solutions. We have moved on from ?monolithic, self-contained, standalone systems,? it says, ?where these worked relatively well.?

Microsoft’s model for enterprise development teams envisages individual members dedicated to one or more specific roles as follows:

  • Product Manager ? owns the vision statement and communicates progress
  • Program Manager ? owns the application specification and coordinates
  • Developer ? delivers a functional, fully-complying solution to specification
  • Quality Assurer ? verifies that the design complies with the specification
  • User Educator ? develops and publishes online and printed documentation
  • Logistics Planner ? ensures smooth rollout and deployment of the solution

Three Broad Structures for Microteams working on IoT Solutions

The organisation structure of an enterprise development team should also mirror the size of the business, and the industry in which it functions. While a large one may manage small microteams of employee specialists successfully, it will have to ring-fence them to preserve them from bureaucratic influence. A medium-size organisation may call in a ?big six? consultancy on a project basis. However, an independently sourced micro-team is the solution for a small business with say up to 100 employees.

The Case for Freelancing Individuals versus Functional Microteams

While it may be doable to source a virtual enterprise development team on a contracting portal, a fair amount of management input may be necessary before they weld into a well-oiled team. Remember, members of a micro-team must cooperate with ideas while functioning semi-independently. The spirit of cooperation takes time to incubate, and then grow.

This is the argument, briefly, for outsourcing your IoT project, and bringing in a professional, fully integrated micro-team to do the job quickly, and effectively. We can lay on whatever combination you require of project managers, program managers, developers, quality assurers, user educators, and logistic planners. We will manage the micro-team, the process, and the success of the project on your behalf while you get on running your business, which is what you do best.

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  • (+44)(0)20-7193-9751 – UK
ISO Certification and Training

Overview

ISO, or the International Organisation for Standardisation, is a global standard-setting body, made up of a network of various standards organisations from among its 162 member-nations. ISO is a vital force in the manufacturing industry, promoting industrial and commercial global standards for specifications and requirements in materials, products, procedures, information, and quality management.

ISO Certification

For a company, an ISO Certification:

? Is an assurance that the organisation, has met the required management of processes and documentation.

? Provides standards on how businesses and organisations manage information and processes;

? Does not impose any regulations;

? Is not like a license that allows a business or company to operate.

Rather, an ISO Certification merely certifies that a management system, a manufacturing process, or an offered service has all the elements for quality assurance and the capability to compete in the international market.

That said however, an ISO Certification is still vital to most businesses because it brings them up to par with global standards. For instance, in many industries, contracting companies are required ISO 9001 certification, and some government contracts, such as in the oil industry or medical technologies, depend largely on ISO 9001 compliance. Most ISO Standards are specific to different industries, processes, and products, but ISO 9001 is a management system standard that can be applied to any company.

ISO 9001

ISO 9001 is unarguably, one of the most established Quality Management Systems program in the world today that can be a useful tool for any organisation. ISO 9001 Standards is currently the recognised standard not only for quality management systems, but management systems in general, ensuring quality in all aspects ? products, services, and documentation.

Any company, regardless of size or sector, aiming to improve its operations and management, would do well with an ISO 9001 Certification, especially if the organisation is prepared to implement the standards throughout the entire organisation and not just in particular departments or divisions.

Find out more about our Quality Assurance services in the following pages:

Total Quality Management

Failure Mode and Effects Analysis

Six Sigma

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  • (+44)(0)20-7193-9751 – UK

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