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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FUJIFILM Cracks the Energy Code

FUJIFILM was in trouble at its Dayton, Tennessee plant in 2008 where it produced a variety of speciality chemicals for industrial use. Compressed-air breakdowns were having knock-on effects. The company decided it was time to measure what was happening and solve the problem. It hoped to improve reliability, cut down maintenance, and eliminate relying on nitrogen for back-up (unless the materials were flammable).

The company tentatively identified three root causes. These were (a) insufficient system knowledge within maintenance, (b) weak spare part supply chain, and (c) generic imbalances including overstated demand and underutilised supply. The maintenance manager asked the U.S. Department of Energy to assist with a comprehensive audit of the compressed air system.

The team began on the demand side by attaching flow meters to each of several compressors for five days. They noticed that – while the equipment was set to deliver 120 psi actual delivery was 75% of this or less. They found that demand was cyclical depending on the production phase. Most importantly, they determined that only one compressor would be necessary once they eliminated the leaks in the system and upgraded short-term storage capacity.

The project team formulated a three-stage plan. Their first step would be to increase storage capacity to accommodate peak demand; the second would be to fix the leaks, and the third to source a larger compressor and associated gear from a sister plant the parent company was phasing out. Viewed overall, this provided four specific goals.

  • Improve reliability with greater redundancy
  • Bring down system maintenance costs
  • Cut down plant energy consumption
  • Eliminate nitrogen as a fall-back resource

They reconfigured the equipment in terms of lowest practical maintenance cost, and moved the redundant compressors to stations where they could easily couple as back-ups. Then they implemented an online leak detection and repair program. Finally, they set the replacement compressor to 98 psi, after they determined this delivered the optimum balance between productivity and operating cost.

Since 2008, FUJIFILM has saved 1.2 million kilowatt hours of energy while virtually eliminating compressor system breakdowns. The single compressor is operating at relatively low pressure with attendant benefits to other equipment. It is worth noting that the key to the door was measuring compressed air flow at various points in the system.

ecoVaro specialises in analysing data like this on any energy type.?

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Transformation to a process based organisation

Today’s global marketplace rewards nimble organisations that learn and reinvent themselves faster than their competition. Employees at all levels of these organisations see themselves as members of teams responsible for specific business processes, with performance measures tied to the success of the enterprise. As team members, they are “owners” of the process (or processes) to which they are assigned. They are responsible for both the day to day functioning of their process(s), and also for continuously seeking sustainable process improvements.

Transforming a traditionally designed “top down control” enterprise to a process-based organisation built around empowered teams actively engaged in business process re-engineering (BPR) has proven more difficult than many corporate leaders have expected. Poorly planned transformation efforts have resulted in both serious impacts to the bottom line, and even more serious damage to the organisation’s fabric of trust and confidence in leadership.

Tomislav Hernaus, in a publication titled “Generic Process Transformation Model: Transition to Process-based Organisation” has presented an overview of existing approaches to organisational transformation. From the sources reviewed, Heraus has synthesised a set of steps that collectively represent a framework for planning a successful organisational change effort. Key elements identified by Hernaus include:

Strategic Analysis:

The essential first step in any transformation effort must be development of a clear and practical vision of a future organisation that will be able to profitably compete under anticipated market conditions. That vision must be expected to flex and adjust as understanding of future market conditions change, but it must always be stated in terms that all organisational members can understand.

Identifying Core Business Processes:

With the strategic vision for the organisation in mind, the next step is to define the core business processes necessary for the future organisation to function. These processes may exist across the legacy organisation’s organisational structures.

Designing around Core Processes:

The next step is development of a schematic representation of the “end state” company, organised around the Core Business Processes defined in the previous step.

Transitional Organisational Forms/ Developing Support Systems:

In his transformation model, Hernaus recognises that information management systems designed for the legacy organisation may not be able to meet the needs of the process management teams in the new organisation. Interim management structures (that can function with currently available IT system outputs) may be required to allow IT professionals time to redesign the organisation’s information management system to be flexible enough to meet changing team needs.

Creating Awareness, Understanding, and Acceptance of the Process-based Organisation:

Starting immediately after the completion of the Strategic Analysis process described above, management must devote sufficient resources to assure that all organisation members, especially key managers, have a full understanding of how a process-based organisation functions. In addition, data based process management skills need to be provided to future process team members. It is not enough to schedule communication and training activities, and check them off the list as they are completed. It is critical that management set behavioural criteria for communication and training efforts that allow objective evaluation of the results of these efforts. Management must commit to continuing essential communication and training efforts until success criteria are achieved. During this effort, it may be determined that some members of the organisation are unlikely to ever accept the new roles they will be required to assume in a process-based organization. Replacement of these individuals should be seen as both an organisational necessity and a kindness to the employees affected.

Implementation of Process Teams:

After the completion of required training AND the completion of required IT system changes, process teams can be formally rolled out in a planned sequence. Providing new teams with part time support by qualified facilitators during the firsts weeks after start-up can pay valuable long term dividends.

Team Skill Development and Continuous Process Improvement:

Providing resources for on-going skill development and for providing timely and meaningful recognition of process team successes are two keys for success in a process-based organisation. Qualified individuals with responsibility for providing training and recognition must be clearly identified and provided with sufficient budgetary resources.

The Hernaus model for transformation to a process based organisation is both well thought out and clear. His paper provides an ample resource of references for further study.

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5 Ways To Grow Your Business | How Field Service Management Software Helps

Building up any business is already hard, more so when it involves providing field services.

A field service business owner has to manage the usual tasks, like scheduling jobs efficiently or inventory checks, and you have to do it while your employees are scattered about on various locations.

It’s the reason FieldElite was created, to provide companies with a much better way to manage and monitor their field workers.

Aside from effective management for your workforce on the move, field service management software can also help your business grow.

5 Ways Using Field Service Management Software Grows Your Business

1. Management Integration

You replace manual field service processes. If your business also uses other management apps, like CRM, payroll, industry-specific software, etc., make sure to integrate them with your chosen field service management software.?

Make those software work side-by-side with your field service management app to achieve streamlined business management.

Integration also removes the possibility of duplicate input on the regular system used and your field service management software, maximising your efficiency and business growth.

2. Improved Tracking

Utilising a field service management software gives you better tracking of every aspect of your field service business.

  • Track your inventory numbers in real-time ? know exactly how much stock is on hand for parts, and when it’s time to order more
  • Constant updates on Key Performance Indicators ? ensure your business is running smoothly
  • First-time fix rates tracking ? avoid wrong rate application
  • Monitor your technician?s performance ? ensuring quality work, in turn, profit.

Grow your business by having improved tracking on meaningful data and analytics produced from your field service management software.

3. Cost Cutting

Cutting costs can improve your bottom line and a lot of businesses turn to laying off technicians to cut costs. With a field service management software, there?s no need to go this route.

You cut costs through no manual processes needing to be completed. No need to hire back-office staff to field service calls or produce paperwork orders.

Your field service software should have all your automated needs met for efficient field job management.

An example of cost-cutting using field service app:

Track how much your technicians drive and find alternate routes for them to take.

  • Reduce gas expenses
  • Reduce repair bills for the truck
  • Finding better alternate routes can give more time to get to more jobs
  • Increased efficiency for the field technician

4.? Mobile Adaptability

Field service companies are focusing on mobility to grow their business. With a field service management software, technicians have on hand the tools and information needed to complete their job.

Field technicians can utilise the following field service software features:

  • Limit how much time they spend completing administrative work with the automated work-order management
  • Complete checklists on their mobile device and follow step-by-step instructions
  • Check service history
  • Close job orders/calls, collect signatures and start the invoice process

With a mobile app, technicians can complete a call faster, increasing the number of job order scheduled each day, giving additional revenue and that helps to grow your business.

5. Automation

What good is a field service management software without automated features??

Automation, in any industry, is an important factor in managing and growing your business.

Here are some examples of automation features and tools that your software needs in field service:

  • Create and convert quotations into work orders
  • Schedule/Reschedule jobs
  • Accept jobs in the field
  • Convert jobs into invoices
  • Preventative maintenance service
  • Customer updates
  • Automated job reports

Business Growth with your Field Service Management Software

Field service management software is growing businesses through automation, tracking and workflow management.

Your operation can run smarter and more efficiently, all while empowering your field technicians to do their job smoothly.

If you haven’t turned to a field service management software yet, you’re missing out on chances to grow your business.

Check out FieldElite to help grow your field service business today!

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