KPMG s Dynamic Audit. Powered by Data+ Analytics. January kpmg.com

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1 KPMG s Dynamic Audit Powered by Data+ Analytics January 2016 kpmg.com

2 Dynamic Audit Roger O Donnell Global Head of D&A, Audit 2

3 Our Dynamic Audit takes a rigorous journey through the data At KPMG, we ve been performing audits for over 100 years, and we ve never been more excited about the value of our audits today. Our Dynamic Audit, powered by Data & Analytics (D&A) innovations, digs deeper into the data, revealing more about the business and its risks. This, combined with a relentless commitment to quality, makes for a highly effective, highly insightful audit. And we think that s of value

4 flow Innovation is about more than the development and integration of tools. Its true value lies in the sum being greater than the parts. Our state-of-the-art workflow amplifies our industry expertise by evaluating what we re doing in our audit and providing us with added and ongoing knowledge about the business. 4

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6 Global Workflow One flow. Our auditors progress smoothly and consistently through a quality KPMG audit the first time, every time. London New York Effective. Automated dependencies and linkages evaluate the downstream impact of data entered up front. Brasilia Built for business. Each of our 70,000 auditors has access to the full suite of KPMG s proven industry expertise. 6

7 Search Moscow Global meets local. Auditors across our global network can interface and connect in their local language. Nairobi Beijing Tokyo Online and global. Video chat, collaboration, project management, and anytime/ anywhere review capabilities mean we are ready when our clients are. Sydney

8 find Our interactive audit D&A solutions, combined with our deep knowledge of the business and industry, enable us to filter, visualize, analyze, and extract information from the data like never before. Information that s valuable to our audit. 8

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10 Searc Powerful new capabilities reveal anomalies and outliers that may point to previously unseen risks. Customer Transaction Analysis Select Business Unit Currency Analysis Period Start Date Analysis Period End Date Extraction Kickoff Date Sh BU0001 USD 04/01/ /30/ /11/2015 New perspectives. Interactive analysis identifies patterns such as unusual or unique transactions, customer or vendor payment trends, and potential valuation risks. Delivery 35.3% Wider coverage. Automated analysis of transactions pricing and quantity adjustments, for instance across the complete sales and purchasing cycles can uncover discrepancies, anomalies and potential revenue risks. Subledger 67.3% Nature of transaction Invoice predecessor Invoice type AR predecessor 10 Deeper insights. Visual analysis of the Procure-to-Pay and Orderto-Cash processes streamlines our ability to see and highlight supply chain and concentration risks, collection and payment issues, and price sensitivity and elasticity in the customer base, and this may highlight gaps in controls.

11 Vendor Analysis Origin of Vendors Details L? Search Data science meets risk assessment. Our risk assessment applies advanced statistical modeling to identify unexpected account correlations based on an analysis of 100 percent of journals. h ow Current Selection ABC Vendor Analysis Total Orders $4,265,947, % Total Invoices $3,645,107, % Total Payments $4,068,514, % Details L? One-time Vendors Details L? Non-active Vendors Details L? Signal in the noise. Our auditors have powerful tools to screen and identify journals matching industry specific pre-defined or tailored risk profiles across the organization, such as unusual or manual posting activity. Client Company Vendor 1 Vendor 2 Vendor 3 14,085 13,662 Vendor 4 Vendor 5 43,741 One-time vendors 46,001 Non-active vendors Vendor 6 Active vendors Active vendors Clearing type Predictive analytics. We are developing the capability to analyze macro and micro, historical and current, financial and non-financial data to determine whether the business is performing consistently fine tuning where we may need to focus our audit

12 show Insights come to life through impactful and interactive visualizations accessed through an intelligent interface. 12

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14 Value unlocked. The same data that informs our audit contains a wealth of valuable insights about employees, processes, and technology. We unlock this value with over 50 benchmarks and KPIs run across business units worldwide. Segregation of Duties Testing Result Overview Customer Master Maintenance Sales Order Processing Sales Invoicing Sales Returns/ Credit Note User Types L Department L Product Count of Users User Types A 14 B 1 Count of Users Department Count of Use 14

15 Dispatch Clearing Processing Number of Users 1 Search Number of Transactions 1 L Amount of Transactions 150 Business flow. We visualize the end-to-end flow of transactions through our clients systems to pinpoint control risks, anomalies in performance, and unusual activity. L Posting Period L Customer rs Product Non-Prod 13 Count of Users Posting Period Count of Users Production 6 Resale ,880 15,107, ,320 9,485,531 L Enhanced risk assessment. Graphical dashboards identify authorization and segregation conflicts in the organization and the specific products, transactions, and individuals which may present a risk

16 value What this all means for us is better audit evidence resulting in a higher quality audit. What it means for our clients is new insights into their business. All of this adds up to more value. 16

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18 Dynamic Audit Exciting new developments are closer than on the horizon. At KPMG, we re developing tomorrow s capabilities today with dramatic innovations to identify new levels of risk keeping pace with a connected world. 18

19 quality + insight = value kpmg.com/auditdata 19

20 kpmg.com/socialmedia kpmg.com/app The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation 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 vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International. Designed by Evalueserve. Publication name: KPMG s Dynamic Audit Publication number: G Publication date: January 2016