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Using a Unified View of Financial Data Representation to Improve Productivity
In Brief
Financial companies store different types of financial data in their computer systems. Absent any guidelines or standards, this data vanes by company, winch hinders auditors from easily getting the data they need to complete engagements. To facilitate easy data access for auditors and other stakeholders, the AICPA Assurance Services Executive Committee (ASEC) has developed the Audit Data Standards (ADS). This article explains the significance of ADS, and helps CPAs use Excel to create and nnpoit one of its representative file foimats.
Financial data representation (FDR) refers to how computer systems organize and store financial information. The sheer variety of information used, and the different FDR guidelines that auditing companies have developed internally to display data, prompted the AICPA to develop the Audit Data Standards (ADS), a set of specifications that auditors can use to more easily retrieve information, even when using different software.
Amy Pawlicki, director of business reporting, assurance and advisoiy seivices, and extensible business reporting language (XBRL) at the AICPA, explains that the goals of ADS are to standardize data at a gr anular level that would help auditors and companies deal with data issues (http : //www. comphanceweek.com/blogs/ accounting-auditing-update/ai cpa-datastandard-digs-deeper-in-corporate-books# ,VBtRgxZI18k). Using the same data extraction specifications, stakeholders can converge onto a virtual platform where they share a unified view of FDR. As a result, ADS will enable CPAs to perform audits or business analytics more effectively and efficiently.
The former chair of the AICPA's Assurance Seivices Executive Committee (ASEC), William Titera, compared ADS as a productivity boost for the audit process similar to Plenty Ford's assembly line for car production (http://blog.aicpa.org/ 2013/09/audit-data-gathering-in-tenmmutes-or-less html#sthash. 60F2h8DU .wBkxm.zy6.dpbs). He cited the example of Hewlett-Packard; HP apphed ADS to its computer system, winch was able to use ADS to reduce the turnaround time for requested data from two weeks to about 10 minutes, thereby making the data readily available to the auditors.
Ultimately, ADS facilitates "data on demand" for auditors who can have the needed data in minutes compared to weeks or even months without an ADS-compliant system. Tins vast improvement wall not only enable auditors to enhance then productivity; it will also reduce the nsk of not being able to...