Data-driven Audit Management at Kohler Co.
“Using ACL and using data-driven analytics, I think, has given us a deeper understanding of our profession, our job, the company, processes, systems. I mean, you name it. I couldn’t imagine us doing what we do without a tool like ACL.”
VP, Internal Audit
Founded in 1873 and headquartered in Kohler, Wisconsin, Kohler Co. is one of America’s oldest and largest privately held companies comprised of 32,000 associates globally. With more than 50 manufacturing locations worldwide, Kohler is a global leader in the manufacture of kitchen and bath products; engines and power systems; premier furniture, cabinetry and tile; and owner/operator of two of the world’s finest five-star hospitality and golf resort destinations in Kohler, Wisconsin, and St Andrews, Scotland.
20% more risk coverage
Continuous controls monitoring
found $600K in duplicate payments in a single month test
Stronger financials, better controls
= better processes and a stronger company
More credible audit findings
backed by data and facts
Interview with Scott Feltner, Vice President, Internal Audit, Kohler Co.
Kohler Co. is a $6 billion company. We have 34,000 employees around the world and operate in 31 countries around the world. My role is to lead the audit function, do audits for the company, be a strategic partner with management, and develop my staff.
What challenges are you faced with as an internal audit function?
We have a lot of locations. We have a lot of plants and we have a lot of retail stores. We have a lot of hospitality outlets. And the challenge we have as an audit team is to cover all of those. Leveraging technology, ACL technology in this case, to cover risk is one of our primary strategies.
How has technology provided greater risk assurance for the organization?
We spend as much time in planning as we do in field work. ACL is a big part of that because we want to investigate data, understand what’s going on (let’s say, at a manufacturing plant) and know what’s occurring before we get there.
We’ve developed a dashboard system using ACL. We have about 12 analytics that we run and we use data visualization for all of our plants. When it’s time to do a plant audit, instead of going to them and saying “well, we haven’t been here for five years,” we go to our dashboard, we look at the data and say this plant needs to be audited because the data says they’re struggling, they’re having problems and things are going south.
We actually estimated that we extend our risk coverage by about 20 percent using analytics, and over our planning horizon we intend to expand that to 30 percent.
How would you describe your return on investment in using a data-driven audit management system?
We’re heavy into continuous controls monitoring. We have 63 analytics that are scheduled and run monthly, and we have a couple that run more often. Our continuous controls monitoring for procure-to-pay discovered US$600,000 in duplicate payments made to a particular vendor—and that was just one analytic out of 63 that we run monthly, for one month. And we’ve been doing this for years!
How has the perception of you and your team by management changed since implementing ACL technology?
By tracking the results of the analytics over time, you can show management has actually improved—and that’s a positive interaction from audit to management. That’s a good thing. And we have the ability, at least in our company, to look at any system, at any level—which no one else has. So when we have a discussion or we see an issue, there’s a lot of credibility.
The big change is now, since we’ve leveraged data analytics, is that the conversation in regards to audit findings is about evidence and facts, and data. It’s much more powerful. There’s not much dispute.
What advice would you give a head of audit deciding whether to invest in data analytics for their team?
Over time those little gains add up and you’re left with better processes, a stronger company, stronger financials and better controls, just kind of one step at a time. Using ACL and using data-driven analytics has given us a deeper understanding of our profession, our job, the company, processes, systems. I mean, you name it. I couldn’t imagine us doing what we do without a tool like ACL.