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!