Increasing the Value of Internal Audit to Management
- Five people on the financial reporting and internal audit teams manage the SEC reporting and SOX process in-house.
- The airline has 219 key controls, including 92 business, 94 IT, 29 ELC, and 4 spreadsheet controls, and approximately 35 to 40 process owners.
- The airline debated keeping an internal audit team in-house or eliminating it and outsourcing the process. The financial reporting and compliance manager was challenged to add value outside of SOX 404, SOX, and the new COSO Framework if the team remained intact.
- Struggling with version control and updating multiple Word®, Excel®, and PowerPoint® files for each change, the team managed files across several locations. A continuous back-and-forth process with external audit was cumbersome. It was difficult to figure out who was reviewing the correct document and to keep track of and clear review notes. This inefficiency was increasing audit fees.
- Consistency issues forced managers at the top of the ladder to review documents and data to make sure they matched. Managers were stuck performing intern-level work—making sure all the documents were accurate and then returning them to the auditors.
- After leveraging Wdesk for SEC reporting and seeing gains in efficiency from linked workbooks, the airline expanded its usage to include SOX documentation and Section 16. The team even took audit fees into consideration—sharing what it was currently paying, what it would like to pay, and how Wdesk would help the team get there.
Why Wdesk works for the internal audit team
- The airline has its entire SOX program uploaded to Wdesk—along with its walkthroughs, narratives, risk control matrices, testing, and COSO Framework. Testing documents include a deficiency report, audit reports, and audit committee presentations. The COSO Framework is in the beginning stages because it's only done once a year. The airline plans to bring testing documents into Wdesk in the near future.
- External auditors use one reviewer seat to quickly review and interact with the internal audit team in Wdesk, which the airline hopes will reduce external audit fees.
- Wdesk allowed the team to streamline and improve the transparency of audit presentations. Internal audit has peace of mind being able to see how far along the testing process is because it is automated within the platform.
- Linking information from testing documents to dashboards allows the team to see a progress map—showing how far along it is in the process, how many controls are in its area, and how many test samples would be within that control.
- In addition to leveraging Wdesk for a deficiency report, the airline built out an audit report of specific information that is required by auditors and sent it to process owners. This audit report shows what was found, what the response was, and what the follow-up testing was.
- "Wdesk was easy to use and quick to learn," said the internal audit manager.
- After getting up and running in just a few weeks, the airline had greater consistency of information throughout documents. Prior to Wdesk, the process of making manual updates and ensuring information was consistent across documentation took several months.
- The internal audit team is spending less time reviewing and preparing work papers as it is able to manage comments and notes in a more effective and efficient manner.
- From a time standpoint, the airline has seen an increase in productivity from both sides of the process—financial reporting and internal audit. This could translate to lower fees for the SOX portion of the audit.
- External auditors are on board and using Wdesk for both financial reporting and internal audit.
- Wdesk is giving the team more time to do other audits outside of the regular, process-focused, audits—increasing its value to management beyond SOX. Management is now asking the team to provide more individual audits because it has more time.
- Blacklines of changes have saved 20 hours during the quarterly review process. The team anticipates that linking will save the team more time as it gets closer to the year-end audit.
- Using Wdesk has allowed the airline to refocus on better assessing risks—not just documentation and getting the job done.
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