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Case Study: Implementing a risk-based continuous compliance assessment program

Case Study: Implementing a risk-based continuous compliance assessment program. ACL Breakfast Workshop The Westin Calgary 11 June 2009. Yogi Schulz Biography. Partner of Corvelle Consulting Information technology related management consulting Microsoft Canada columnist & CBC Radio host

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Case Study: Implementing a risk-based continuous compliance assessment program

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  1. Case Study:Implementing a risk-based continuous compliance assessment program ACL Breakfast Workshop The Westin Calgary 11 June 2009

  2. Yogi SchulzBiography • Partner of Corvelle Consulting • Information technology related management consulting • Microsoft Canada columnist & CBC Radio host • PPDM Association board member • Industry presenter: • Project World - 4 years • CIPS Informatics - 7 years • PMI - Information Systems SIG - 2 years • Convergence - 4 years • PPDM Association - several years

  3. PresentationOutline • Business Context • Compliance Assessment System • Development description • Benefits • Conclusions • Recommendations • Discussion

  4. Business Context • Regulator publishes requirements • Oil & gas industry expected to comply • Some requirements relate tomeasurement and reporting

  5. Business Problem • Current situation: • Challenge maintaining compliance audit coverage • Suspicion of poor compliance • Goals to: • raise level of assurance over state of compliance • raise level of compliance • Approach: • Apply CSOX audit concepts to compliance audit • Improve monitoring

  6. Oil & Gas IndustryHigh-Level Data Flow FieldProductionOperations FinancialAccounting FieldDataGathering Alberta’soil & gasregulator RevenueAccounting ProductionAccounting AlbertaEnergy PetroleumRegistryAlberta

  7. Compliance AuditPhilosophy “Trust, but verify” - Ronald Reagan

  8. Continuous auditing • A method used by auditors to perform audit-related activities on a continuous basis • Changes the audit paradigm from periodic reviews of a sample of transactions to ongoing audit procedures that test 100 % of transactions resulting in timely and comprehensive insights into risk and control issues

  9. Compliance Assessment SystemOverview InputDatastores Data Extract NoncomplianceIndicators ComplianceAnalytics

  10. Compliance Assessment SystemData Extract Data Extract Alberta’soil & gasregulator FieldInspectionSystem ExtractA - n

  11. Compliance Assessment SystemData Analytics Extract A ComplianceAnalytics NoncomplianceIndicators Extract B ComplianceAnalytics

  12. Data AnalyticsExamples • High metering difference • Production rate trending up • Puzzling trends in gas flare, fuel, vent, meter difference • Gas production greater than oil production for an oil well • High or low fuel consumption

  13. Compliance Assessment SystemReporting Noncompliance Indicators OperatorReports Reports ProductionAudit TeamReports

  14. Compliance Assessment SystemArchitecture Master Reports Data Extract ComplianceAnalytics Transform

  15. Compliance Assessment System Development • Building the system - a part-time effort • ACL dramatically reduces the amount of code • Significant architecture, design and testing effort

  16. Benefits of ACL for compliance assessment system development • Cost-effective and rapid development • Adaptable to change as source datastores change • Adaptable to change ACL Compliance Analytics Routines • Encapsulates expert understanding of data relationships in complex datastores • Simple validation of candidate compliance assessment indicators

  17. Benefits of ACL for compliance assessment system operation • Formal, fully auditable system • Fully automated operation • Scalable solution

  18. Business benefits of thiscompliance assessment activity • Assurance over the state of compliance • Feedback to oil & gas operators • Improved data quality for all stakeholders • Comprehensive auditing • Greatly increased auditor productivity • Independent of skilled data analysts

  19. Conclusions • Continuous auditing addressed our business challenge • ACL enabled development and operation of our Compliance Assessment System

  20. Recommendations • Investigate opportunities to employ continuous auditing within your organization • Consider ACL as the technology to implement continuous auditing • Consider ACL for batch audit applications

  21. Next Steps • Identify datastores to examine • Experiment to identify potential data anomalies • Design, build and test a data analytics system • Collect dollars revealed

  22. Questions &Discussion Can you help us improve continuous auditing ? Please fill out evaluation form

  23. Implementing a risk-based continuous compliance assessment program Corvelle Consulting 700, 250 - 5 Ave. S. W. Calgary, Alberta T2P 2V7 Phone: (403) 249-5255 E-mail: YogiSchulz@corvelle.com Web: www.corvelle.com Yogi Schulz Partner of Corvelle Consulting Information technology related management consulting Microsoft Canada columnist & CBC Radio host Industry presenter PPDM Association board member

  24. Bibliography • Continuous Auditing

  25. Noncompliance Indicator FileRecord Layout • Noncompliance Indicator id • Production Year/Month • Operator BA id • Facility id • Noncompliance Indicator score

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