Revolutionize controls testing

Breaking the controls testing status quo

As stakeholders across the enterprise compete for dollars and the interests of their specific functions, a decentralized environment can make it difficult to gain a comprehensive view of compliance efforts. Without a comprehensive view, it can be challenging to identify what works and what doesn’t, spot opportunities for savings, and determine where collaboration among functions would benefit the organization. Though common, this decentralized, siloed approach not only leaves stakeholders fatigued and unmotivated to disrupt the cycle, but also stalls the overall productivity of the organization and can destroy synergistic value.

Given the large number of resources that traditional SOX compliance programs require, material changes in them often correlate to significant shifts in the business. But without those shifts, the status quo often remains: As soon as external auditors sign off, the compliance cycle resets without invoking change, producing another year of limited returns and further increasing the total cost of compliance.

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Reevaluate your controls testing environment

Used for decades, traditional control testing approaches are derived from statistical methods. While they can help identify the symptoms of failures, they are limited in their ability to uncover and address root causes. Often, this means additional analysis—commonly based on manual techniques that attempt to extract meaningful inferences from a small sample of data—is required. These traditional sample-based approaches mirror the siloed structure of the compliance programs themselves. Not encompassing the full population, they lack a comprehensive perspective, which can lead to fraud and expense challenges.

But new advances in technology and computing power can exponentially improve risk assessment and enable a new breed of controls that utilize automated, advanced analytics. This enhanced risk assessment is designed to reduce the overall scope and creates value by directing effort toward the risks that matter. Meanwhile, the new analytics-fueled controls empower organizations to quickly and continuously monitor control performance.

They also bring a holistic focus and a unified view by introducing detailed analytical dashboards. These enhancements collectively enable the organization to pivot from doing compliance for the sake of compliance to providing greater value. As controls are streamlined, people can shift their focus toward more strategic activities, such as performing analysis and providing insights in support of key business priorities.

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Changing the scope of controls testing across functions

Leveraging automation enables organizations to break the compliance-cycle mold by fundamentally changing how controls work across compliance, operations, and finance. By aggregating data from disparate sources, organizations can deliver quick wins within data-driven processes, such as accounts payable, IT security, and change management. With the data centrally aggregated, analytics can detect anomalous patterns, inappropriate behaviors, and activities, and even identify individuals who warrant increased monitoring—without the typical lag or the significant overhead associated with traditional monitoring.

Once organizations implement automation, accessible data, and visualization capabilities, they can start using them—extending them where necessary—to modernize controls testing across the enterprise.

• Executives can observe the status of various controls through centralized dashboards and apply this intelligence to make key operational decisions continually, rather than annually or specifically, based on an event.
• Compliance can use the same dashboards to drill down further into the data to reassess risk factors, examine day-to-day procedures, and realign the control framework to upgrade or replace existing controls.
• Internal and external audit teams can also leverage this ongoing flow of analytical data to create additional views for testing, perform control activities, and continuously monitor efforts.

Using technology enablement to move past routine activities creates a big opportunity for audit and compliance teams to add value as they reallocate their time to process improvement, modernization, and projects that affect the customer experience.

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Accelerating your organization’s controls testing transformation

For companies that want to accelerate the transformation of their controls environment, outsourcing controls compliance may be a good option, since it provides access to resources who understand the current regulatory environment, have extensive industry knowledge, and are trained in the latest technologies, techniques, and methods.

With or without outsourcing, an enhanced controls platform is beneficial to interrupting the cycle and fundamentally changing the controls environment. There is a significant opportunity to break the compliance-cycle mold and take a fresh approach to organizational risk—and to do so in a way that creates meaningful change for employees as they pivot from being checkers of facts for the lines of defense to generators of ROI for the business.

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