Unlocking the Value of Audit—Case study: Focus on sales transactions

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2© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Issue

The organization needed enhanced insight into their risk exposure across sales transactions by better understanding the operation of ERP approval processes and controls.

3© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Analysis and insight

KPMG’s D&A capabilities revealed that a significant volume of sales transactions were being processed manually, circumventing the standard approval processes and controls.

4© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Analysis and insight

The engagement team specifically addressed these transactions as they were considered higher risk. In addition, they applied automated audit routines to 100% of the organization’s processed sales transactions, which uncovered pricing and quantity discrepancies that should be considered in evaluating the results of the audit, and which could be shared with management as insights learned from the procedures.

5© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Result

Thanks to our D&A capabilities, KPMG was able to precisely focus our audit effort on areas that presented a risk of material misstatement, thereby improving audit quality. The company also received powerful insights into its exposure to higher risk transactions and was able to implement process improvements resulting in the reduction of pricing and quantity discrepancies, increased efficiency and better customer satisfaction.

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© 2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independentfirms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

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