Because a picture is worth more than a thousand words: process intelligence in digital audits

Process intelligence visualises real processes in the context of a digital audit, revealing anomalies and potential for further optimisation - just like in real life.

Here is a prototypical example: a medium-sized company with several locations uses SAP as their central ERP system. Over the years, this system has grown in complexity alongside with the company’s growth. This resulted in numerous new entities and business processes as well as changes in technical configurations. Consequently, the company only has a partial understanding of the processes currently relevant to the value chain, both in terms of efficiency and usage at the respective sites and with regards to exceptions and errors.

An audit team typically performs sample testing on individual transactions and follows-up on discrepancies noted. Through this the team analyses whether posted documents and processes could be an exception of the rules and there are any significant violations (such as segregation of duties conflicts). Their work also considers the characteristics such as degree of standardisation (deviations from SAP standard) or the use of historical enhancements.

Audit comfort is a Herculean task
Situations such as those described above are part of an auditor’s day-to-day business. However, that means audit teams face the demanding task of auditing enormous volumes of highly complex data as well as process chains that are not fully known, while at the same time ensuring the desired audit comfort can be achieved through a risk-based audit approach.

Intelligent from start to finish
During a digital audit, auditors first extract all relevant application data from the core ERP system(s). The algorithms of their audit tools then automate and evaluate financially relevant documents, identify business transactions, establish critical correlations, and prepare everything with audit relevance. That is where process intelligence comes into play: it visualises the entire process landscape in the form of detailed end-to-end process flows. This enables accounting-relevant documents to be examined fully, including relevant configurations. The template-based visualisation is generated automatically, efficiently and takes all relationships of the business units into account. The high degree of automation, offered by advanced audit tools of this nature, provides quick answers to key audit questions, without letting the auditor get bogged down to define and implement the structure of the visualisation models.

Facing reality
Unlike the previous random sampling procedure, a full digital audit paints a true-to-life picture. It allows those in charge to quickly recognise correlations and exposes the context of the process. It highlights exceptions and irregularities as well as deviations from the to-be business processes and internal controls. This approach provides a complete and unbiased view of all value-creating processes and allows for an audit that is truly focused on what matters most.

The bottom line
Digital audits are nothing new. They examine accounting-relevant transactions, calculate key figures and uncover irregularities. The true quantum leap, however, comes from the use of process intelligence. Such analytics help visualise actual business processes quickly using proven templates. This creates a whole new understanding of what is really happening. Using process intelligence, auditors help the audited companies increase transparency about real-life processes, make decisions based on facts and data, optimise their process design and capitalize on further potential in a targeted manner.


Contact us

Cristian  Manganiello

Cristian Manganiello

Partner for Risk and Compliance Management Services, PwC Switzerland

Tel: +41 58 792 56 68

Marco Pilato

Marco Pilato

Senior Manager, IT Audit, PwC Switzerland

Tel: +41 58 792 54 08