A Faster Audit?
We set ourselves the challenge of looking at the financial model audit process to see how we can make it faster for our clients.
For those of you un-familiar with the typical audit process, it usually goes something like this:
- Engage auditors around 1 month prior to bid / financial close
- Initial iteration – 2 weeks – Issue first report
- Iteration 2 – 1 week – Issue second iteration
- Iteration 3 – 1 week – Issue final iteration
- Issue final report / Opinion letter
Not to mention the mad scramble prior to bid/close as numbers are changing up to the last minute at the same time as the letter is being finalised.
We think that this iteration based approach is inherently inefficient.
How we do things differently with model audit 2.0:
- Speed/efficiency is not all about elapsed time. We get involved earlier, as early as possible in fact so that we can familiarise ourselves with the model and raise any material issues before they impact the bid / close process. The late engagement of auditors is typically driven by the auditor’s contractual limitation on the number of model iterations they will review. As you may know, that’s not how we roll.
- We use live issues lists, securely shared online. This means that our clients are notified of issues straight away. We don’t have the initial 2 week wait for the first issues to start to flow. This means that our clients can be working on resolving issues as quickly as we are raising them.
- We have done away with the iteration based approach. We handle issues quickly and pragmatically via frequent video calls where we talk through the issues and suggest resolutions. This means we don’t have the issues list ‘ping pong’ with the same issues bouncing back and forth without getting resolved.
- We use our very own Openbox software to radically speed up our shadow modelling process. Our modular build approach means that we can build our shadow model templates much faster than was traditionally possible.
This combination of process, commercial and technology innovations means that the conventional wisdom of how an audit is approached, and how long it should take no longer apply. To find out more about our model audit process and model audit 2.0, click here.
Please let me know your thoughts. It would be great to talk.