Building for the Future

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© ACL Services Ltd.

Alvia Brown

Director, Global Operations

Sean Pinto

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© ACL Services Ltd.

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Company Overview

 World’s largest non-alcoholic beverage company with $46.5 billion in

worldwide revenues

 Primarily produce and sell concentrate to bottlers who produce

packaged beverages and sell them to customers

 Bottlers can be company-owned (CCR, Germany, Philippines, China

and India, or Franchise operations

 Operations in more than 200 countries

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Corporate Audit Department Org. Chart

Robin Moore,

VP and Chief of Internal Audit

Paul Docekal-

COBC John Mathew- Group Audits

Karen Brey- GBS/COE/Corp

Audits

Tim Twomey

CCR Audits Tim Twomey- IT Audit Lars Hepers-

BIG/CPS Audits

Barbara Newman, Exec. Admin. Assistant India Abhijit Ray India Staff Philippines Staff China Maggie Ma China Staff Rowland Edwards Martin Winkler Thomas Markovic COBC Specialists (Worldwide) Alvia Brown CAD Global Operations IT Staff- (Worldwide) Sean Pinto – Technology Pia Weckendorf- Methodology

Global Ops. Staff Admins

Calandra Tipton James (Park)

Thomas

Domestic (including former CCE) and International Audit Staff

Mark Bryan Tamara Romany Kina Morgan Julia Vaughn James Wheeler Germany Staff

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Global Operations?

 Global Operations team formed in 2011 out of an operational excellence

exercise to bring structural efficiency to the department

 The team consists of two verticals

– Methodology, Trg

– Communications, Technology and Reporting

 Data analytics strategies and leadership is managed by the technology

team, along with other significant technology initiatives

 Led by Director who reports to the VP/Chief of Internal Audit

 All department level leadership is managed by this team, leaving

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Organizational Structure: Audit

Department

 Headed By CAE, 20 management staff, 12 CoBC (Code of Business

Conduct), 9 Global Operations and 104 staff auditors

 20 international, 39 domestic financial, 20 Information Technology, 25

regional (the Philippines, Germany, China and India)

 Data Analytics – 2 personnel, non-dedicated, based in Atlanta and part

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Systems

 ERP Systems: SAP, Three installations:

a) Enterprise SAP – Corporate, Business units, Concentrate Plants, and Regional

Finance Centers

b) Bottling System:

» CokeONE – All major Coca-Cola owned Bottlers except CCR

» CCR SAP – Separate SAP system for Coca-Cola Refreshments

 Data Analytics Systems

c) AX Server (Production and Development Environments), AX Web Client (formerly

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Data Analytics Objectives

 Audit Team

– Support enhanced coverage of data populations audit testing

– Ensure effective and efficient sampling

– Ensure time saving by

» efficient, centralized data extraction,

» Formatting and filtering data for use by auditors on the field

 Code Investigation Team

– Proactively detect red flags to be investigated by fraud group

 Business Units

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Yesterday…

What existed in January 2011

 Segregated DA efforts, DA programs running in bottling locations in

India, China, Philippines

 Sparse DA efforts in Atlanta – mainly trending information, which did not

resonate with audit teams

What did not exist

 Co-ordination efforts for existing DA initiatives at CCR, or other bottlers  Thinking around analytics efforts around other business verticals

(regional finance centers business units, CPS plants etc)

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Sophistication

2012

A u d it C o n tri b u ti o n Hindsight Insight Foresight Level 2 Applied Level 3 Managed Level 4 Automated Level 5 Monitoring Level 1 Basic

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What did we do?



Planned

a) Started with the end in mind

b) “Guys, the two of you can’t sustain this using Desktop!”

c) Had an auditor on our side

d) Had a vendor on our side

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What did we do…2?



Talked

a) With other companies who had a data analytics strategy

b) Weeded out common good ideas

c) Signed up for communities, User Groups etc.

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Then?

Set Goals

 Use analytics for all applicable audits in 2012

– we do almost 100+ audits a year

 Started with 3 audit cycles - Field General Ledger and Close, Procure to

Pay, and Cash Disbursements

 Procure ACLTM Analytics Exchange and ACLTM Direct Link for SAP®

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Today…

What exists…

 Financial Audits

– We cover Enterprise SAP for first phase of work (used at all Region Finance Centers, Business units, CPS plants, and Corporate)

– Use AX Server for 5 audit processes – Field General Ledger and Closing, Procure to Pay, Cash Disbursements (Payments), Cash Receipts, and Accounting for Marketing – a total of 50 tests.

 IT Audits

– We have pure IT Audit Tests (UNIX/AIX configuration parameters testing, MainFrame and DB2 testing standardized on AX) – a total of 32 tests

 Fraud/Anti-Bribery Work

– We also set up some tests around Fraud/FCPA work – especially Keyword searches on expenses, P-Cards etc.

Consistently using Direct Link (Data extraction) and AX (Data Preparation, processing) for 100% of all international audits

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Sophistication

2013

A u d it C o n tri b u ti o n Hindsight Insight Foresight Level 2 Applied Level 3 Managed Level 4 Automated Level 5 Monitoring Level 1 Basic

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Benefits Thus Far…



Audit Issues and Cost Recoveries

– Identified eight audit issues, including one ‘high risk’ issue on five audits, thus ensuring dollar recoveries

– Identifying such issues in the past wouldn’t have been possible with the ‘random sampling’ approach.



Increased Audit effectiveness

– More than thirty reports increased coverage of transactions to 100%

– Six analytics set up to point out potential ‘red –flags’, which may indicate fraudulent activity.



Increased Audit efficiencies

– In 2012, 33 tests over three audit processes replaced reports, which the auditors used to extract at location, or rely on the operation for help

– Anecdotal feedback from an audit team, potentially changing audit approach -- extremely encouraging as use of ACL technology has replaced manual audit testing

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Parameter Metric – Pre AX

Appetite Limited to 1 or 2 locations every audit (each audit is approx. 7-8 weeks)

Size 300K – 400K transactions

(per extraction)

SAP data extraction time 3 days – 1 week (several analytics weren't processed due to size e.g. VMF

changes) Prep and Running time for

analytics on desktop 9-12 hrs (approx.)

Lead Time 2 weeks

Metric - Post AX

No limit (completed 17 locations in month of Aug) 1.5-2MM transactions per six months per location)

20 - 40 minutes

1-2 hrs 2 days

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Dates?

1 2 3 4 5 6 7 8 9 10 11 12 January 2011 Formation of Global Operations March 2011

Work out a broad Data Analytics

Strategy

May 2011

Department level ACL training, and ACL workshop to support overall plan July 2011 Pilot Cycle 1 (ACL Analytics) Sept 2011 – June 2012

Roll out 3 cycles, and solicit feedback, refine tests Aug – Sept 2012 Get ACL consultants to port all existing scripts to server February 2011 Formalize department objectives, add Data Analytics to every auditor’s objectives April 2011 Meet with Companies June 2011 1. Establish resource plan 2. Work with IT and Procurement to acquire AX August 2011

Get feedback for Cycle 1 and develop Cycles 2

and 3

July 2012

Direct Link and AX Server implemented

Oct – Dec 2012

1. Consistent use – all audits 2. More Cycles 3. Data analytics

for IT Audits

Timeline View of TCCC’s Corporate Audit Department’s DA Journey

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More Dates?

1 2 3 4 5 6 7 8 9 10 11 12 Jan-Mar 2013 Clean up existing analytics June - July 2013 1. Begin developing audit tests for CCR 2. Upgrade AX hardware Sept 2013 1. Review and include feedback from CCR’s tests 2. Complete FCPA Program Nov - Dec 2013

1. Roll out all CCR analytics

2. Complete integration of non

SAP (IT, other bottlers) analytics Feb – Mar 2014 Begin partnering with other organizations in the company (Ethics and Compliance, GBS, GDG) May 2014 onwards Consolidate April – May 2013

1. Get Direct Link installed on CCR’s SAP, 2. Continue developing analytics for domestic and other cycles Aug 2013 1.First set of analytics rolled out for CCR 2. Work to consolidate FCPA program Oct 2013 1. Complete 10 tests for domestic audits Jan 2014 1. Work on installing Direct Link on SAP HR instance 2. Refresher Training April 2014 Develop Some HR data tests

Timeline View of TCCC’s Data Analytics Roadmap

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Tomorrow…

 100% of our audits rely substantially on data analytics executed at the center. At

least 20% of actual testing performed centrally

 Audit management uses Dashboard/Visual Management to integrate into audit

planning and supplement annual risk assessment process

 Continuous control monitoring (CCM) program in place for executive management

to see compliance status across the globe.

 Client Operations and CIC (Corporate Internal Controls) also use analytics to

proactively measure compliance, specially for audits, which are on CSA (self Certification)

 Continuous monitoring of FCPA and anti bribery analytics, via heat maps and

dashboards.

 Extend DA program to other parts of the company, e.g. Global Data Governance,

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