Manuel CoelloContinuous Auditing and Monitoring

AnalyticsUnleashing the power of the audit process

1. Project evolution

2. Establishing a Data Mart

3. An integrated approach

4. Use of CAATTs in Internal Audits

5. P2P – 20 power-packed analytics

6. Other Projects

Agenda

► Founded in 1843 and based in New Britain, CT

► Manufactures Tools and provides Security Solutions

► 16,000 employees worldwide

► Grew revenue from $2.2B in 2003 to $4.5B in 2008

► Soon to become $9.5B with the acquisition of Black and Decker

Background

27

75

95 97

68

150

919 21

29 3442

Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10

Analytics Team

Project History

Management Sponsorship

Audit Exchange - Team collaborationExtraction

Process – Data Mart

Projectio

ns

CAATTsconsidered as

required

Establishing a

Data Mart

Non-SAP

Audit Exchange

Audit Server

Batch Process

ACL scriptto import data

ACL scriptsfor testing

Manual Downloads/

Outside Systems

Email Notification of exceptions

Exceptions posted in sharepoint to drive accountability

-Entry

- Vendor Payments

- Goods Receipt

- Purchase Orders

- Vendor Master

- Payroll

- T&E

- Credit Card

Results

Results

Results

Web Application

File name

7 day filter

Example of an import script

LeverageTables

Invoice ImportsScript

Scheduling

Integrated Approach-Analysis

- Continuous Auditing- Continuous Monitoring

How do we get there?

Business Units

Technology

Processes

Metrics Audit Team

Wave 2

Wave 1

Continuous Auditing

Wave 3

Transformation Map

ACL desktop Edition

SharePoint

Auditors following up on certain exception reports

Business involvement

Documenting Resolution

Collaboration with SOX and E&Y

Measuring Control effectiveness

Execute recorded scripts

Access SAP tables directly

ACL Directlink

Mercury

Audit Exchange

Design advanced analytics

SAP training

Full time project manager

AutoAudit

Testing of automated controls

Testing cockpit

Business involvement for Shared Services

Entity-wide involvement

Centralized testingLeverage BI/BW

Infopack

Scheduler

CONTINUOUS TESTING OF CONTROLS AND RISKS

RESULTING IN:

� TIMELY NOTIFICATION OF GAPS AND WEAKNESSES

� IMMEDIATE FOLLOW UP AND REMEDIATION

- Cash recovery/ cost avoidance

- Drive business performance

- Immediate remediation

- Support Compliance

- Fraud deterrence

� Errors

� Duplication

� Control breakdowns

� Policy violations

� Fraud detection

� Anomalies

� Unusual patterns

� Based on exception rules

� Design scripts to be run periodically using an audit software

� Extract transactions and perform analysis of the full universe

How Test for Benefits

Design Implementation Execution

� Project Methodology

� Determine Scope

� Develop a Project Plan

� Design Sharepoint Site

� Evaluation of Technology Tools

� Analysis of IT landscape

� Preliminary discussion with key stakeholders

� Develop scripts

� Testing of scripts

� Develop testing cockpit

� Stakeholder Training

� Status meetings with stakeholders

� Business Process Procedures

Planning

� Document process under review

� Gather requirements from key stakeholders

� Prepare list of scenarios

� Define electronic data requirements

� Review download procedures with IT

� Execution of test script

� Follow up on exception report

� Document results in Sharepoint

� Update and report results

► Look for volume, money, risk and opportunities

► Exceptions researched at the Controllership Level

► Partner with a SME in each area with an

executive sponsoring the review

► Only exception testing for users – not reporting

► One year data; exceptions strategically selected

Approach

►Why-why analysis focusing on root-causes

► Resolution of exceptions aggressively pursued-remediation oriented

► No formal audit reports issued

Approach

Analysis

Overview Abnormalities TrendsOutliers

Continuous Auditing/Monitoring

1. Payments beyond termination date

2. Multiple changes in merit increases

3. Unusually high salary increases

4. Excessive overtime

5. Multiple or unusual bonuses

6. Duplicate employees (name/similar names)

7. Salary employees without email account

8. Same bank account and diff clock numbers

9. Employees and vendors with the same address/bank account

10. Employees without the usual earnings or deductions

Payroll

1. Duplicate expense submissions

2. Suspicious MCCs

3. Even amounts

4. High Mileage

5. Unusual Items

6. Checks issued by AMEX

7. Split transactions

8. Spending trends

9. Non-preferred vendor

10. High misc expenses

T&E

1. Duplicate Payments

2. Old aged trade payables

3. Payment terms

4. Duplicate vendors in Master File

5. Invoice prior to PO Date

6. Split Purchase Orders

7. Vendors in OFAC list

8. Non-preferred vendors

9. PO price differences

10. Purchases of even numbers

P2P

CAATTsComputer Assisted

Audit Tools and

Techniques

Audit Area Audit Test Audit Area Audit Test

Source-to-Pay Payroll

Payments � Suspicious invoice sequence Payments � Excessive merit increases and WIN awards� Invoices falling below approval limits � More than one payment per period� Duplicate Payments - same vendor and invoice number � Payments to same bank account with different names� Duplicate Payments - same invoice and amount paid to two different vendor numbers � Unusual bonuses� Duplicate Payments - same vendor, amount and invoice date � Employees without the usual deductions� Frequency analysis based on first two digits of payment amount � Pattern of continual overtime� Payments for even multiples � Payments beyond termination date� Payments to employees Master File � Duplicate/similar employee names � Payment runs on weekends � Employees with incomplete fields� Audit sampling tool

Purchasing � Purchases of unneded material (E&O inventory) Other� Purchase price unreasonably high (using price history)� Aged open Purchase Orders

Payables � Outstanding old debit memos System Access� Proper segregation of duties in risky financial areas (based on GRC "rulebook")

� Old open invoices � Terminated employees with system accessVendor Master � Match employee and vendor bank accounts

� Match employee and vendor addresses Fixed Assets � Useful lives per SWK policy� Search of unusually incomplete fields in the Master File � Recalculate depreciation� Payment terms not in compliance with DOA � Completeness in Fixed Asset Subledger "fields"

� Capitalization below threshold limitsQuote-to-Cash

Inventory � Recalculate E&O analysisSales � Sales price lower than price lists (price overrides) � Recalculate usage data used for E&O

� Credit analysis and trends � Excessive inventory write offs (unusual trends)AR Subledger � Collectability analysis

� Recalculate aging General Ledger� Manual Journal Entries (rounded amounts, unusually large entries)

� G/L and subledger reconciliation � Rounded adjustments� Customer net credit balances � Reversals� Excessive write-offs (unusual trends) � Posting to "miscellaneous" accounts

Customer Master � Customers exceeding credit limits

� Payment terms not in compliance with DOA FCPA� Match "key" words (e.g. government, General, etc.) to payment and expense data

� Countries or customers from government banned lists

CAATT

ACL Project

Aged open payables

Repository allows for team collaboration

P2PPower-packed

Analytics

VENDOR_NAME VENDOR AMOUNT_IN_DCDOC__DATE TYPE REFERENCENORTHEAST UTILITIES 1000244 (1,052) 03/26/2008 XR 00207-0308 Same invoice processed twice. Error by typing the date (2007)NORTHEAST UTILITIES 1000244 (1,052) 03/26/2007 KR 00207-0308 Same invoice processed twice. Error by typing the date (2007)

LANCET GLASS LTD 1001707 (1,283) 02/15/2007 XR 50394shipping to diff address,two invoice

LANCET GLASS LTD 1001707 (186) 06/29/2007 KR 50394shipping to diff address,two invoice

AUSTIN HARDWARE & SUPPLY INC 1004581 109 08/03/2007 KG 650246diff credit date and salesman,two invoice

AUSTIN HARDWARE & SUPPLY INC 1004581 (157) 07/12/2007 RE 650246diff credit date and salesman,two invoice

NATIONAL GRID 1014380 (844) 08/30/2007 RE 93009-0907bill payment, one for Aug. one for Sep.

NATIONAL GRID 1014380 (816) 10/02/2007 RE 93009-0907bill payment, one for Aug. one for Sep.

KONICA MINOLTA BUSINESS SOLUTIONS 1029660 (1,516) 08/15/2007 KR 4590557Triple paid. Same bill entered with different dates

KONICA MINOLTA BUSINESS SOLUTIONS 1029660 (1,516) 07/16/2007 KR 4590557Triple paid. Same bill entered with different dates

Analytic: Duplicate Payments - Same vendor and invoice number

Typo error in date

TYPE VENDOR VENDOR_NAM REFERENCE AMOUNT_IN_DOC__DATE BUSA

XR 1030888 SIFY LIMITED EXPIMS069 (11,892) 7/31/2008 0700XR 1030888 SIFY LIMITED 0212254-IN (11,892) 7/31/2008 0700

XR 1035840 K & L Kaine Enterprise 508 (7,424) 7/4/2008 0700

XR 1035840 K & L Kaine Enterprise 608 (7,424) 7/4/2008 0700

KR 1011570 DIV OF WORKERS COMPENSATI INV011508 (4,138) 1/15/2008 0700

XR 1011570 DIV OF WORKERS COMPENSATI 48860-0108 (4,138) 1/15/2008 0700

RE 1015894 ALLIED WASTE 2001786263 (3,580) 9/30/2007 0719

XR 1015894 ALLIED WASTE 0742-001786263 (3,580) 9/30/2007 0719XR 1011534 KFORCE INC 3247099 (2,349) 10/5/2007 0700XR 1011534 KFORCE INC 3247099A (2,349) 10/5/2007 0700

Analytic: Duplicate Payments - Same vendor, date and amount

Typo or clerical errors

VENDNO Vendor Name Invoice in SequenceTotal Invoices % Invoices AMOUNT 4742 Wielaard Stellingsystemen 276 324 85% 207,876 7000010 Scan Modul MEDI-MATH B.V. 11 13 85% 107,802 2196 Scan Modul System 1237 1490 83% 5,602,788 2195 ByrumLabflex SA 352 450 78% 14,524,336 60000546 Garmt Design 3 4 75% 31,190 7000011 Scan Modul MEDI-MATH B.V.B.A. 18 26 69% 282,657 4894 VDL Home Tech 10 18 56% 19,124 4714 ADP Nederland B.V. 12 33 36% 6,437 2524 Sueters Interieurbouw 30 96 31% 169,890 60000076 Athlon Car Lease 20 73 27% 190,309 4693 Etiflex Holland 3 13 23% 8,613 5783100 Projectinrichting van Leeuwen 9 46 20% 79,303 3609 Hendriks Techniek Flevo BV 3 16 19% 26,829 4765 Broere Vliegpassages B.V. 3 16 19% 11,785 4761 Sellox B.V. 1 7 14% 5,588 5008 Transverba-Waalex B.V. 2 14 14% 7,726 5026 Café Bar Holland b.v. 1 7 14% 3,288

Analytic: Suspicious Vendors using the unbrokeninvoice sequence

Our company is their main customer

COCO VENDOR_NUM_C # invoices Amount # invoices Amount616 52 3,211 1,325,339 311 2,114,353 615 2196 1,169 860,752 405 4,922,257 615 4742 305 122,925 18 84,119 616 2 157 60,238 20 121,198 615 2 113 55,924 2 82,774 615 2195 103 120,273 374 14,472,678 616 4 101 32,933 2 7,728 615 2524 95 78,762 26 95,610 615 60000250 87 53,428 - - 616 60000076 57 11,728 14 173,162 615 4450 56 26,053 15 236,435 615 4165 52 31,145 2 6,395 616 4841 48 11,021 - - 616 60000019 45 77,772 1 3,694 615 2160 44 26,207 2 5,108 615 4924 44 31,137 6 19,812 615 3 43 14,500 1 2,915

Below threshold $2,500 Above threshold $2,500

Analytic: Invoices falling below approval limits

Transaction that may fall under the radar

C_COCO DAY BUY_FROM_VENDOR_NO_POSTING_DATE NO_ AMOUNT616 Sun 4 1/25/2009 40N08798 1,421 616 Sun 60000076 1/25/2009 40N08799 12,528 616 Sun 60000076 1/25/2009 40N08800 136 616 Sun 60000076 1/25/2009 40N08801 157 616 Sat 2 1/31/2009 40N08831 10,918 616 Sat 4169 1/31/2009 40N08832 107 616 Sat 4841 1/31/2009 40N08833 213 616 Sat 4714 1/31/2009 40N08837 104 616 Sat 60000076 1/31/2009 40N08838 32 616 Sat 4169 1/31/2009 40N08839 110 616 Sat 4169 1/31/2009 40N08840 51 616 Sat 2 1/31/2009 40N08841 115 616 Sat 2 1/31/2009 40N08842 80 616 Sat 4914 1/31/2009 40N08843 100 616 Sat 4914 1/31/2009 40N08844 65 616 Sat 4914 1/31/2009 40N08845 72 616 Sat 4911 1/31/2009 40N08846 4,361

Analytic: Payment runs on weekends

Check runs on Saturday or Sunday

C_SKU INVENTORYQUANTITY_ON_HANDRESERVE AMOUNT # POs PO QUANTITYPurchases contained in the reserve

Amount

40852100D 2,372 3 2,372 21,193 8 32 3 2,372 4130127/0 7,663 9 1,916 11,943 5 14 9 7,663 55705 1,373 40 1,373 9,747 2 38 38 1,304 40912100 3,746 4 937 4,683 2 5 4 3,746 2434540 3,638 79 3,638 3,454 2 75 75 3,454 201087 3,162 62 2,530 3,060 1 60 60 3,060 40913200 2,376 2 594 2,376 1 2 2 2,376 C10-RVS 2,629 2 1,315 1,315 1 1 1 1,315 1064720 772 10 386 768 2 10 10 772 4182054 71 2 71 500 4 14 2 71 2064310 126 4 126 315 1 10 4 126

Analytic: Purchase of unneeded material

Purchases of E&O Material

NO_ UNIT_COST UNIT_COST1 INCREASE % AMOUNT COUNT11104521065011131 1,545 2,643 71 1,538,487 321004521063011100 1,208 1,672 38 1,381,912 161104521065011141 1,545 2,643 71 1,285,581 241106521045011131 1,578 2,724 73 1,054,751 211106521045011141 1,578 2,328 48 999,083 201006521043011100 1,133 1,133 0 770,569 162364251 4 12 165 530,446 611004509063011100 1,004 1,324 32 405,090 81106521054011122 2,963 2,963 0 325,958 60002010020000400 249 382 53 315,566 92364253 3 4 25 305,292 60

Analytic: Price increases unusually high

Inflated prices

Analytic: Benford Law

Above upper bound

Analytic: Employee and vendor have the same bank account

SupplierCode SupplierName IBAN incoterms last_change SupplierAddress C01458 A *nc 20080213 VIA RIVA C00379 B *nc 20080415 VIALE FIUME N.5

6461 C *nc 20080627 VIA ERMINIA MAGGI 23

EMPLOYEE_NUMBER NAME IBAN TOWN ADDRESS 30077 A RANCO VIA CASTELLO INFERIORE 5 12942 B BRENTA VIA CEREDA 2 MFG C CIACCI VIA PILONE 129

Same bank accounts

VENDOR_NUMBER AMOUNT_EURO CURRENCY Invoice__ DATE_MOVEMENT NUMBER_MOVIMENT 1491 (156,000) EURO 20081222 20081222 2721867

662 (108,000) EURO 20081126 20081128 27078535531 (72,000) EURO 20080923 20081014 26852446183 (50,400) EURO 20080702 20080828 26615591349 (43,200) EURO 20080929 20081020 26871956488 (42,000) EURO 20080625 20080909 26662494188 (40,200) EURO 20081126 20081126 27062055558 (36,000) EURO 20081127 20081210 27173162382 (36,000) EURO 20081218 20081222 27216104398 (34,800) EURO 20080115 20080129 25522475739 (33,600) EURO 20080930 20081031 26933946470 (33,000) EURO 20081223 20081229 27232741503 (30,000) EURO 20080310 20080410 25973411503 (30,000) EURO 20080701 20080702 26388855547 (25,200) EURO 20081211 20081215 27189983664 (24,000) EURO 20080131 20080222 25667623664 (24,000) EURO 20080331 20080402 2587714

Analytic: Purchases of even numbers

Multiples of 100

Aged open payables

Aging Amount CountLess than 6 months 2,014,930 7446 mo-1 yr 622,949 2901yr - 2yr 296,229 922yr - 3yr 100,000 453 yr - 4 yr 75,000 484 yr - 5 yr 50,000 25Greater than 5 yrs 25,000 20Totals 3,184,108 1,264

Analytic: Open aged trade payables

Multiples of 100Aged AP

Payments per Year

# VendorsPercent of Count

Percent of Field

# Payments Amount

0 - 4 10,907 70.39% 18.01% 17,212 74,505,538 5-9 1,921 12.40% 13.35% 12,753 59,573,419 10-24 1,920 12.39% 29.30% 28,001 122,172,795 25-49 517 3.34% 18.07% 17,271 119,465,712 50 - 99 172 1.11% 11.87% 11,346 42,806,722 100 - 200 50 0.32% 6.92% 6,613 45,117,170 >200 9 0.06% 2.47% 2,359 36,015,004 Totals 15,496 100% 100% 95,555 499,656,360

Aged open payables

Analytic: Analysis of non-electronic payments (checks)

Opportunities to move to ACH

Transaction_Amount CountPercent of Count

Percent of Field

Transaction

_Amount <1,000 48 13% 0% 21,047 1,000 - 4,999 93 26% 4% 259,015 5,000 - 9,999 78 22% 8% 564,232 10,000 - 24,999 70 20% 16% 1,116,768 25,000 - 99,999 57 16% 36% 2,484,553 100,000 - 249,999 9 3% 24% 1,619,194 250,000 - 500,000 2 1% 11% 750,510 Totals 357 100% 100% 6,815,318

Aged open payables

Analytic: P-Card Analysis

11 employees drive 35% of the purchases

Aged open payables

Abnormal trend

Vendor Num Status TEST1 TEST2 TEST3 TEST40000700184 NOT DUPLICATE0000700185 DUPLICATE ADDRESS0000700186 DUPLICATE ADDRESS0000700187 NOT DUPLICATE0000700189 NOT DUPLICATE0000700192 DUPLICATE NAME TaxID20000700196 DUPLICATE NAME0000700198 DUPLICATE NAME ADDRESS0000700199 NOT DUPLICATE0000700200 NOT DUPLICATE0000700202 DUPLICATE TaxID20000700204 NOT DUPLICATE0000700205 NOT DUPLICATE0000700206 NOT DUPLICATE0000700208 DUPLICATE NAME ADDRESS0000700209 NOT DUPLICATE0000700210 DUPLICATE NAME0000700212 DUPLICATE NAME0000700214 DUPLICATE TaxID20000700215 DUPLICATE NAME0000700216 NOT DUPLICATE0000700217 DUPLICATE NAME ADDRESS0000700218 DUPLICATE NAME ADDRESS TaxID20000700219 DUPLICATE NAME0000700221 DUPLICATE NAME ADDRESS0000700222 NOT DUPLICATE0000700223 DUPLICATE NAME ADDRESS TaxID20000700224 NOT DUPLICATE0000700225 NOT DUPLICATE0000700226 NOT DUPLICATE

Analytic: Duplicate Vendors in Master File

11 employees drive 35% of the purchases

Aged open payables

Duplicates:1. Same name2. Same

address3. Same Tax ID

Analytic: Use of non-preferred vendors

Vendor # Amount # Invoices Amount # Invoices Amount # Invoices Amount0001013617 790,900 14 - - - - - 0001009169 461,444 193 424,998 154 - - - 0001022503 251,848 10 - - - - - 0001011534 164,626 122 15,180 12 - - - 0001028885 105,112 13 - - - - - 0001002872 79,077 29 - - 79,077 29 - 0001011527 68,452 24 31,927 14 - - - 0001031176 64,898 22 - - - - - 0001001894 52,669 18 2,916 3 - - - 0001035941 47,472 2 - - - - - 0001034829 41,360 72 41,360 72 - - - 0001034907 41,083 4 41,083 4 - - - 0001033046 38,720 25 - - 38,720 25 - 0001028798 33,191 14 - - - - - 0001006691 29,486 32 29,486 32 - - - 0001020424 27,997 39 - - 27,997 39 - 0001031818 27,992 16 27,992 16 - - - 0001018005 22,220 1 - - - - - 0001030548 20,463 8 20,463 8 - - - 0001012835 18,018 19 - - - - - 0001008166 17,248 16 - - 17,248 16 -

Total Companym 1010 Companym 1020 Companym 1040

Temp Labor

Aged open payables

Business, volume and frequency

Payment_terms

C_Category Amount # Vendors

Z006 Non-inventory 90,684,183 2,748Z035 Non-inventory 52,874,490 2,707ZD04 Non-inventory 49,866,751 4ZC99 Non-inventory 24,521,644 201Z013 Non-inventory 23,661,948 584Z005 Non-inventory 20,080,190 744ZC99 Inventory 12,872,017 56Z007 Non-inventory 12,350,877 186Z005 Inventory 12,140,090 339Z013 Inventory 9,099,744 124Z006 Inventory 8,122,559 631ZD06 Inventory 6,535,509 1

1 Non-inventory 6,224,268 228

ZD05 Non-inventory 5,123,545 2ZD04 Inventory 3,317,955 1

1 Unidentified 2,895,549 49ZD25 Unidentified 2,636,546 1Z035 Inventory 2,606,600 41Z002 Unidentified 2,554,497 145ZD06 Non-inventory 1,668,997 3

Analytic: Analysis of Vendor Terms

Aged open payables Payment terms by category

Stratification CountPercent of Count

Percent of Field

Amount

0.00 - 9,999 100 69.24% 1.91% 500,000 10,000 - 24,999 200 9.81% 2.47% 5,000,000 25,000 - 99,999 300 11.96% 9.84% 20,000,000 100,000 - 249,999 200 4.66% 11.17% 25,000,000 250,000 - 499,999 50 1.88% 9.78% 15,000,000 500,000 - 1,000,000 250 1.55% 16.43% 30,000,000 >1,000,000 10 0.90% 48.40% 100,000,000 Totals 1,110 100% 100% 195,500,000

Analytic: Vendors with PO Box as only address

Aged open payables

Risk with mid-volume vendors

COMPANY_CODEENTERED_BY INVOICE_DATE PO_DATE PO_NUM ITEM_DESC VENDOR_NAME ITEM_NUM98 SMM0505 3/31/2009 11/20/2009 573041 Not inventory item FASTENAL COMPANY 843103000093 KML1025 10/28/2009 10/30/2009 572552 Not inventory item MAIN STREET BANK 843101920093 KML1025 10/28/2009 10/30/2009 572552 Not inventory item MAIN STREET BANK 843101920098 GDG0831 7/14/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE068598 GDG0831 6/30/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE068598 GDG0831 7/20/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE068598 GDG0831 7/14/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE068598 GDG0831 6/30/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE068598 GDG0831 7/20/2009 10/23/2009 572330 .0685 FOR SPENAX BEKAERT CORPORATION WIRE068593 FJT0722 9/25/2009 9/28/2009 571701 ROD,CONSTRUCTION STAPLE,6.3MMGERDAU AMERISTEEL 16709693 FJT0722 9/25/2009 9/28/2009 571701 ROD,CONSTRUCTION STAPLE,6.3MMGERDAU AMERISTEEL 16709691 HJM1203 9/24/2009 9/25/2009 571666 Not inventory item TEKNICOTE, INC. 843103000091 FJT0722 9/14/2009 9/15/2009 571344 ROD,CONSTRUCTION STAPLE,6.3MMGERDAU AMERISTEEL 16709698 SMM0505 3/18/2009 9/10/2009 571204 Not inventory item MSC INDUSTRIAL SUPPLY CO INC 843103000098 SMM0505 5/6/2008 9/10/2009 571205 Not inventory item MSC INDUSTRIAL SUPPLY CO INC 843103000098 GDG0831 4/9/2009 8/24/2009 570598 Not inventory item AEROTEK INC 843101910098 GDG0831 4/9/2009 8/24/2009 570598 Not inventory item AEROTEK INC 843101910098 GDG0831 4/4/2009 8/24/2009 570598 Not inventory item AEROTEK INC 843101910098 GDG0831 5/7/2009 8/24/2009 570598 Not inventory item AEROTEK INC 843101910098 GDG0831 5/21/2009 8/24/2009 570598 Not inventory item AEROTEK INC 8431019100

Analytic: Retro Purchase Orders

Aged open payables

Invoice date prior to PO date

Analytic: Payment date prior to invoice date

Aged open payables

Invoice date prior to payment

INVOICE_NUM PAYMENT_DATEINVOICE_DATE CHECK_NUM PAY_AMT PA_JE_ CURRENCYED80740237 20081204 20081209 68653 621.14 PA0006400 CAN ED80740345 20081204 20081209 68653 586.14 PA0006401 CAN ED80740465 20081204 20081209 68653 86.24 PA0006402 CAN ED87039683 20081204 20081209 68653 68.19 PA0006403 CAN

Analytic: Payment prior to due date

Aged open payables

Invoice date prior to payment

VENDOR_NAME INVOICE_DATE DUE_DATE PAYMENT_DATE C_DIFFDAYS1PAY_AMTJISCO CORPORATION 20080909 20081208 20081124 14 48,375 JISCO CORPORATION 20080908 20081207 20081124 13 39,200 JISCO CORPORATION 20081001 20081230 20081222 8 27,291 BESCO MACH INDUST (ZHEJIANG)CO 20081106 20090105 20081229 7 14,489 KLEAR KUT ENGRAVING 20080930 20081114 20081107 7 3,604 HOLLINRAKE COMMUNICATIONS 20080930 20081114 20081107 7 545 DB ADVANTAGE INC 20080930 20081114 20081107 7 320 MACHINERIE PLUS LTEE 20081209 20081210 20081204 6 621 MACHINERIE PLUS LTEE 20081209 20081210 20081204 6 586 MACHINERIE PLUS LTEE 20081209 20081210 20081204 6 86 MACHINERIE PLUS LTEE 20081209 20081210 20081204 6 68 MERISCA MARKETING 20081121 20090105 20081231 5 2,369 JISCO CORPORATION 20080928 20081227 20081222 5 54,582 BRODIE INC 20081006 20090104 20081231 4 595 MSC INDUSTRIAL SUPPLY CO INC 20081006 20090104 20081231 4 532 MSC INDUSTRIAL SUPPLY CO INC 20081006 20090104 20081231 4 279 NICOLSON CUTTER GRIND & SUPPLY 20081120 20090104 20081231 4 274

► Trade Compliance

► Data Conversions

► Review of employee access to restricted areas

► Review of domains (network access)

► Sales Taxes

Other Projects

CURRENT/FUTURE STATEPRIOR STATE

Retrospective Review

Near Real Time Review

Narrow scope

Sample Approach

Entity wide

Full Universe

CURRENT/FUTURE STATEPRIOR STATE

Surprises with controlbreakdowns

Rapid response tocontrol breakdowns

Fraud identified by

Complaints / accidently

Audit tests donemanually

Fraud identified/deterredby data indicators

Usage of CAATTs

Conclusions► CAATTs uncover issues that could be missed by

auditors

► CM&A program proactively protects the company

from errors, abuse, waste, revenue leakage, fraud

► The magic is in the data but the value is in remediation

► Audit becomes an agent of change