Impact of Shared Services on Internal Audit Deryck Fuller, Mike Cappetta, Melissa Paulson October...

Impact of Shared Services on Internal Audit

Deryck Fuller, Mike Cappetta, Melissa Paulson

October 24, 2013

Agenda

• Our Audit Universe• Risk Assessment Process• Case Studies• Benefits of Shared Services• Keys to success

3

MGM Resorts International – A Brief History1993 MGM Grand:

The City of Entertainment

1998

ACQUISITION 1:

New York New York

Primm Valley Buffalo Bill’s

Whiskey Pete’s

2000

ACQUISITION 2:

Bellagio The Mirage

Treasure Island

Boardwalk

Golden Nugget

Beau Rivage

Golden Nugget – Laughlin

MGM Grand- Darwin, Australia

MGM Grand- Detroit

2005

ACQUISITION 3:

Mandalay Bay Excalibur

Luxor Gold Strike Colorado Belle

Edgewater Circus Circus Circus Circus Reno

Gold Strike Tunica

Slots-A-Fun Rail Road Pass

Monte Carlo

Nevada Landing

1999

1995

City Center 2009

- Divested

Risk Assessment Process

• Company Wide Risk Assessment • Business Process Risk Assessment

Risk Assessment Process

• How often do you perform risk assessments?• How do you gain comfort with controls over

financial reporting by testing a single process?• How do you determine business units to test

in a shared services environment?• How do you determine sample selections in a

shared services environment?

Key Questions for Shared Service Audits

• Does my audit universe need to be redefined? How can I better define my audits in the new environment?

• How should I reassess my audit strategy on an ongoing basis? • Do the controls now reside at the SSC or are they still in the business

units?• How much coverage can I get as a result of auditing at the center?• Do I need to audit only at the SSC?• How does an SSC affect sample size and sample selection when one

moves from a decentralized environment to a shared environment?• Are the processes and templates used across the SSC consistent? Do

work-arounds proliferate?• Can I use automation in the audit process more effectively now that I

am auditing in an SSC environment?

Source : PWC

Business Process Audits (Case Studies)

• Accounts Payable• Revenue Accounting • General Accounting

Accounts Payable

• Do the controls now reside at the SSC or are they still in the business units? Do I need to audit only at the SSC?

• How much coverage can I get as a result of auditing at the center?

• Are the processes and templates used across the SSC consistent? Does this impact sample size?

Revenue Accounting

• Do the controls now reside at the SSC or are they still in the business units?

• How much coverage can I get as a result of auditing at the center?

General Accounting

• How much coverage can I get as a result of auditing at the center?

• Are the processes and templates used across the SSC consistent?

2008 2009 2010 2011 2012 -

200

400

600

800

1,000

1,200

1,400

1,600

1,347

1,064

647

449

327

General Accounting

Year

Hour

s

Benefit of Shared Services

Keys to success

• Understand new technologies implemented• Add value by identifying process

improvements• Early involvement

– Steering committee – Milestone reviews

• Reassess audit strategy on an ongoing basis • Don’t fall into the SALY trap

Thank you!