Preface:
Nancy is Director — Analytics with GRC Analytics Inc. GRC Analytics Inc. are market leaders in the field of governance, risk management and control analytics for the last decade and pioneers in the implementation of audit process and data analytical tools. In a short span of time this bellwether firm had managed to establish a footprint in the accounting, finance and business assurance segment which were the erstwhile arena for large accounting and audit majors. This fast-paced growth was fuelled by a group of techno-finance professionals who delivered consistent value propositions to all their clients by riding on the backbone of contemporary assurance technology.
GRC Analytics Inc. leveraged audit technology like general audit softwares, data mining tools, work paper administration tools, reporting applications, enterprise continuous control monitoring applications and enterprise risk management applications to deliver value-added, high-return valuefor- money results to all the clients from retail to manufacturing, to information technology and healthcare.
GRC Analytics Inc. was solely responsible for overseeing all data analytic projects and applied knowledge management research projects for the firm.
In a recent Internal Audit — Engineering & Technology conclave, Nancy was presenting on the role of ‘Use of CAATs for Operational Audits and Assurance’.
Introduction:
Nancy began by providing the backdrop to the use of CAATs for the operational review of central plant maintenance activities at an engineering industry.
The Central Maintenance Cell (CMC) of a manufacturing company was entrusted with breakdown maintenance and preventive maintenance for ten plant centres in the company. The COO of the company was interested in studying and reviewing problem areas and potential threats in the maintenance process. He instructed the Head-CMC, to provide Nancy and her team with maintenance data for undertaking specialised business analysis.
The Head-CMC in turn provided Nancy with an electronic dump containing the following file layout:
Presentation on operational review of plant maintenance through CAATs:
Nancy wanted to drive home the efficacy of general audit tools to the conclave of participants comprising internal auditors, technical auditors, investigators, risk managers, IT security professionals and more. She decided to help the participants visualise the utility of audit tools (GAS) through a few live plant maintenance case studies and discussions. These case studies served as a primer for a general awareness and appreciation amongst the participants.
Case studies presented were:
(a) Plants experiencing frequent Breakdown Maintenance (BM):
Nancy summarised the electronic dump on the plant code and plant description along with filtered criteria to extract all maintenance codes containing ‘BM’.
She performed this summarisation to arrive at count of breakdown maintenance instances for each plant centre.
With the summarisation file in place she finally performed a top records filter to capture the ‘Top 5’ plant centres by highest frequency of breakdown maintenance.
Armed with this information, the Head-CMC was able to investigate and diagnose the reasons for high breakdowns on specific plant centres by looking at the age, usage, history of maintenance, nature of maintenance, plant output quality and allied details.
(b) Plants experiencing Breakdown Maintenance (BM) immediately after Preventive Maintenance (PM) in the same month:
Nancy appended a new field to the electronic dump and captured the month of maintenance against each maintenance transaction activity.
She then went on to perform a duplicate (exclusion) test on the plant code, plant description and month with the field that must be different being maintenance code.
The resultant report provided a listing of plants being halted for ‘BM’ immediately after ‘PM’ in the same month.
With the instances generated, the Head-CMC was able to investigate and diagnose the reasons for sudden breakdowns after preventive maintenance by studying the nature of preventive maintenance undertaken and the quality of maintenance spares used.
(c) Plants halted for Breakdown Maintenance (BM) beyond 24 hours:
Nancy appended a new field to the electronic dump and captured the time taken to complete each maintenance activity by simply arriving at the difference between the ‘Maintenance start time’ and ‘Maintenance end time’.
She then applied a filter to list plants under ‘BM’ for more than 24 hours.
Finally Nancy converted the filtered report of ‘Above 24 Hour BM cases’ into a frequency distribution as below:
This frequency distribution allowed the Head-CMC to focus on pain areas in the plant maintenance process.
Conclusion:
Nancy culminated her presentation by reiterating that general audit tools are time-tested, stable, robust, powerful, internationally acclaimed and user-friendly applications designed by auditors for auditors.
She added that no tool is a ready substitute for the internal and technical auditor’s acumen and judgment, but is a powerful, cost-effective facilitator.
She encouraged all the internal and technical auditors present to embrace tools and reap the benefits of an idea whose time has come.
