Automated auditing of SAP master data

Posted by Prof. Dr. Nick Gehrke on Oct 26, 2016 5:00:00 PM

Part III of the series: “Digitization of auditing SAP Purchase Processes”

Today’s blog post introduces three interesting indicators for exposing process shortcomings in the area of master data maintenance in SAP purchasing.

  1. Digitization of auditing SAP purchase processes
  2. How process auditing is transformed through digitization
  3. Automated auditing of SAP master data
  4. Auditing of purchase orders and goods received
  5. Invoice auditing in SAP
  6. Just pay it twice: auditing payments in SAP
  7. The search for exotic processes
  8. Segregation of Duties in the SAP purchase process
  9. SAP data structure for the purchase to payables process
  10. The end of digitization - professional judgement in procurement

 

The concept of indicators

Indicators always correspond to an audit-relevant audit question. Technically, they are database queries which pick out documents from the database that fulfil certain predefined criteria.

 

In the broadest sense indicators are simple data analytics.

 

Nevertheless, an indicator must be defined in a way that it always and exclusively aims at detecting a number of single documents. As a result all documents in a database undergo an examination on whether or not an indicator is relevant to a document or not (the indicator classifies all documents within a sort of “black-white-world”).

After the indicator has "run through", all relevant documents are being marked with the indicator. Affected documents then have a “mark” with regard to this indicator.

To better navigate between indicators, every indicator is allocated to different dimensions. Every indicator belongs to exactly one process, to a certain process area and has a certain audit objective, such as:

  • Process dimension: purchase to payables, order to cash, fixed asset and inventory, cross process
  • Process area dimension: master data, goods received, inventory, payment, ...
  • Audit objective dimension: compliance and correctness, restricted access, saving opportunities, process standardization

Furthermore, a risk is documented for every indicator which indicates what could “go wrong” or to what extend a certain kind of risk exists.

Master your data.png

 

Three TOP indicators of master data maintenance in purchase

As already mentioned, every indicator is associated with one process, one process area, one audit objective and one risk respectively. In the following, three indicators from the area of master data maintenance in SAP purchasing will be introduced.

Altogether I have designed and implemented 45 indicators for the purchase process. You can download the details about all purchase indicators here.

 

Download

 

Vendor master data with inappropriate or incomplete payment terms

This indicator aims at identifying saving opportunities.

There is a risk that inefficiencies or working capital losses were caused by loose payment management.

The criteria for this indicator is: 

The document will be marked because the payment terms of the referenced vendor are not maintained or are inadequate.

 

Vendors without bank account

This indicator has the audit objective compliance and correctness.

There is the risk that payments cannot be traced due to missing bank account.

The criteria for this indicator is: 

The document will be marked because it references a vendor where a bank account has not been maintained. However, at least one payment was identified for this vendor.

 

Missing Vendor

This indicator is associated with the audit objective compliance and correctness.

There is the risk of insufficient traceability of business transactions, due to missing vendor master data.

The criteria for this indicator is:

The document will be marked as it references a vendor that does not exist in the vendor master data.

 

Topics: Master Data, Purchase, SAP, Audit

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