One of the challenges that management and auditors face is efficiently obtaining data from accounting and operational systems in a usable format following a repeatable process. The new series of standards from the American Institute of CPAs (AICPA) for organizing general ledger and sub-ledger data may reduce the effort involved in finding, preparing, and sharing data for audit purposes. The Audit Data Standards (ADS) establish a new, standardized way for companies to share data that is helpful to the audit process with internal and external auditors and others.
The ADS provide management increased access to data used in performing business modeling, reporting, and analysis. Internal auditors, compliance office personnel, and others within a company can benefit from having more efficient access to standardized information stored across a broad range of internal structured data stores. Because the data and rules are expressed in a common and internationally standardized method, different software applications can be used to extract the data. This enables a broad range of software that could be used to access, view, interrogate, and analyze the data.
The steps to produce ADS-compliant files, many of which do not need to be performed again after the initial setup (unless there are changes to the underlying systems), include:
- Develop an understanding of the ADS files you wish to exchange with your external auditor or internal users of data
- Identify the files/tables in your accounting system(s) necessary to obtain the data required
- Determine the best method to extract the information
- Map from the available data fields to the ADS fields
- Evaluate which data transformation is necessary
- Perform the extraction
- Validate the resulting files
The specific steps of producing ADS-compliant files will vary based on the accounting system(s), available report writing, export and extraction capabilities of the products installed, the accounting and technical skills available to the organization, and the information needs of the auditors and internal users of data.
ADS implementation can have a nominal impact on existing system infrastructure by using third party mapping applications. Third party mapping applications can be used to establish the initial connection between the source data and the ADS definitions and reused period to period and across similar systems.
In our article, "Extracting Your Company’s Data with the New Audit Data Standard", we introduce the Audit Data Standards and address basic implementation steps companies should consider realize the benefits from them. For additional information, visit the AICPA Audit Data Standards Working Group web page, which has copies of the current standards and some additional articles and blogposts.