Public Accounting Firm XY's possibility to increase its Process Maturity in Documenting Significant Classes of Transactions: Optimisation of a Business Process
Nicolas Stieger, 2021
Bachelor Thesis, confidential
Betreuende Dozierende: Emanuele Laurenzi
Keywords: Audit, Business Process Optimisation
This bachelor thesis investigated the optimisation of a public accounting firm’s Significant Classes of Transactions (SCOT) documentation process. SCOTs are defined as an audit
client’s major processes affecting significant financial statement accounts. Efficient documentation of SCOTs allows auditors to quickly identify any risks of material misstatement.
Hence, this work’s main objective was to optimise the documentation process of the most important SCOTs for public accountants namely the order-to-cash (O2C), purchase-to-pay
(P2P), and the financial statement closing process (FSCP). To achieve this goal, the following three sub-objectives were proposed: Understanding key concepts evolving around business process optimization, Determining the as-is documentation process on the three SCOTs: O2C, P2P and
FSCP, Determining the to-be documentation process on the three SCOTs: O2C, P2P and FSCP
To achieve these three sub-objectives, qualitative and quantitative research approaches were applied. Specifically, to address the first sub-objective, a literature review was performed.
Based on theoretical learning, the as-is documentation process was determined and analysed. For this, unstructured interviews and a structured survey were conducted at management and
partner level. To determine the to-be documentation process the findings of the as-is situation were considered. Additionally, an agile approach was adopted to quickly create a prototype.
The agile approach allowed the gathering of feedback from clients, and the accommodation of incremental changes through fast cycles. To validate the to-be documentation process, data
were gathered using a structured survey at assistant and senior level.
The findings of the as-is process analysis confirm that the documentation process has deficiencies. Two of the major findings were as follows: (1) The performance measure time indicates that half of all assistants and senior staff take
between 12 and 16 working hours to document a SCOT, which is considered time intensive. 2) The performance measure quality shows deficiencies, since more than half of all
associates have never identified a significant control deficiency and prepared documentation does not meet internal requirements. In order to solve the issues identified and, thus optimise the SCOT documentation process, an Excel template was created for each of the three SCOTs, the scope of which enables internal
and external regulations to be met. Additionally, conditional formatting, dropdown cells, and
multiple formulas increase the efficiency of the user. The evaluation of the to-be SCOT documentation processes provides measurable evidence that the SCOT documentation
process is optimised and, therefore, the prevailing objective of this bachelor thesis achieved.
A major success is that the working hours could be reduced to between 4 and 8 hours, whereas while the quality of the SCOT documentation increases. These achievements led to the
acceptance of the to-be SCOT documentation process by Company XY. In conclusion, this bachelor thesis proposes an optimisation of the documentation process on
the three SCOTs: O2C, P2P and the FSCP. In future work, the same optimisation approach could be applied to other SCOT documentation business processes such as Payroll.
Studiengang: Business Administration International Management (Bachelor)
Fachbereich der Arbeit: Accounting, Banking, Controlling and Finance