Informational analysis involving application of complex information system.

Informational analysis involving application of complex information system. Clébia Ciupak (Univerde) - clebia.ciupak@terra.com.br Adolfo Alberto Vanti (Unisinos) - avanti@unisinos.br Antonio José Balloni (CTI) - antonio.balloni@cenpra.gov.br SUMMARY The aim of the present research is performing an informal analysis for internal audit involving the application of complex information system based on fuzzy logic. The same has been applied in internal audit and is product of a master s degree study involving the integration of the accounting field into the information systems field. The technological advancements can provide improvements to the work performed by the internal audit. Thus we aim to find, in the complex information systems, priorities for the work of internal audit of a high importance Private Institution of Higher Education. The applied method is quali-quantitative, as from the definition of strategic linguistic variables it was possible to transform them into quantitative with the matrix intersection. By means of a case study, where data were collected via interview with the Administrative Pro-Rector, who takes part at the elaboration of the strategic planning of the institution, it was possible to infer analysis concerning points which must be prioritized at the internal audit work. We emphasize that the priorities were identified when processed in a system (of academic use). From the study we can conclude that, starting from these information systems, audit can identify priorities on its work program. Along with plans and strategic objectives of the enterprise, the internal auditor can define operational procedures to work in favor of the attainment of the objectives of the organization. I. INTRODUCTION The current economic scenario in which the organizations are inserted is dynamic and demands from the managers the knowledge of the environment under a systemic approach. Such environment characterizes itself by the identification of opportunities and threats, both internal and external. Overseeing the organization as a whole may provide the managers more accurate decision-making, attending the organizational objectives. The growing technological advancements have made viable the utilization of computing tools or applications which propitiate to the user the access to information with higher dynamicity. Among the most recent ones, the complex information systems such as extensible Business Related Language (XBRL) which discloses financial information (Mauss, et al, 2007), Business Intelligence which helps decision making (Balloni, 2006) and fuzzy logic stand out. Fuzzy logic and BI are used in this work. Both approached at the present work, being the first so as to contextualize theoretically the complex systems and the latter with practical application at internal audit. Cerchiari and Erdmann (2005, p. 4) state that auditing is nowadays seen as an instrument of administrative control which stands out as a converging point of all feats, facts and information so as they are reliable, suitable, absolute and secure. Thus, one may state that internal audit must be provided with useful, reliable and opportune information. To attend to such necessity one may make use of the internal controls system and of the information technology resources so as to elaborate an audit plan which, by means of operational procedures, may collaborate with the goals of the institution, defined at the strategic planning. The problem question implicated on the present work is: How to define strategic priorities for the internal audit work via complex information systems? For such, firstly issues which contextualize the accounting audit are broached, right afterwards the focus turns to the complex information systems and their application at the strategic level of an IHE (Institution of Higher Education). Thus a case study was performed at a private institution of higher education, where by means of interviews with the administration prorector, the data for posterior analysis were obtained. II. AUDITING Crepaldi (2000, p. 27) defines auditing as being the gathering, the study, and the systematic analysis of the transactions, procedures, operations, routines, and financial statements of an entity. It is thus understood that auditing is a set of detailed studies of all operations which are part of an organization, preventing situations which generate frauds or may incur in error through the application of periodic tests on the internal controls from the companies. Auditing may also be seen as a systematic observation of internal controls as well as of the documentation from the enterprise. However, at modernity the concept of auditing is more dynamic, attributing to it functions which comprise the entire administration of the enterprise, initiating a policy towards orientation, interpretation, and forecasting of facts. From the exposed, one notices that auditing has moved from being seen as a simple verification of accounting documents to assuming a more significant attitude at the management of the enterprise, thus aiming at aiding the

aforementioned at the acquirement of positive results. It is emphasized still, that auditing may be external or internal, in accordance to the presented as follows. Regarding the external audit, Crepaldi (2000) highlights its main purpose is to verify the financial and patrimonial situation of the enterprise. The operation results in the net wealth, and the origins and applications of resources in accordance to the Brazilian accounting norms. It is performed by an external auditor, with no employment relationship to the audited enterprise. Franco and Marra (995), present the taxation of income as one of the causes which lead the businessmen to have a higher control of the accounting records. Sirikulvadhana (2002) mentions that technology impacts the format at which auditors perform their task. They believe, still, that it is important for the auditors to convey and combine their knowledge and technical skills with the specialists in the field of information technology, following the evolution of such field, so as to accomplish their task in an efficient manner. For such the present work directs informational analysis to internal audit with the application of complex information system based in fuzzy logic. Oliveira et al. (2006) affirm the internal audit task comprises all existing services, programs, operations, and controls at the institution so as to advise management in the examination and evaluation of the adequacy, efficiency, and efficacy of the activities, being able to evaluate, inclusive, the quality of performance of the areas in relation to the attributions and to the plans, goals, objectives, and policies adopted by the enterprise. For Paula (999), the huge progress in communications made the world more competitive, which causes competence, technology, and much creativity to prevail in the elaboration of the audit. Attie (2006) emphasizes, still, the importance of internal auditing, mentioning that it is responsible for ensuring, to the enterprise s management, if the plans, policies, accounting systems, and internal controls are being followed in accordance to what determined by the organization. On the other hand, Mautz (985) believes that in order to make the internal audit work more efficient, qualified professionals which possess accounting and auditing techniques knowledge are in need, and most important, that they know how to utilize such knowledge. The task of internal audit has its freedom somewhat restricted to the management of the enterprise, but such does not difficult its performance if it possesses free will so as to investigate and develop its activities. Planning may be outlined, in accordance to a work plan which may involve the identification of work, the execution time, the personnel involved, the verification of controls, the determination of weak and strong spots, the conclusion of work, and the final report. The significant advancement of technologies enables accounting audit the utilization of technological resources which favor the execution of their works, among which the information technology, specialist systems, and intelligent systems stand out or even complex of information from which the work emphasizes the analysis of application of the latter. III. COMPLEX INFORMATION SYSTEMS BUSINESS INTELLIGENCE AND FUZZY LOGIC For Cameira (2003) (apud RAUTER and VANTI, 2005), the Business Intelligence BI systems correspond to a conceptual evolution of the systems in support of decision. Barbieri (200) understands that BI is the utilization of varied sources of information to define strategies of competitiveness at the enterprise s businesses, with the definition of regulations and techniques for adequate formatting of high data volume, aiming at transforming them into structured depositories of information. These data may be originated from various techniques of prospecting of information via Competitive Intelligence, or of conceptual sources as Knowledge Management. Dresner (apud Baum, 200) classifies Business Intelligence as a conceptual umbrella, under which a variety of technologies which assist the end user in accessing and analyzing the sources of quantitative are sheltered. According to Birman (2003), under the concept of BI there is a spectrum of technology solutions that attend some of the vital necessities of the organizations. They are constituted of a combination of already known concepts with technological evolution capable of quickly absorbing gigantic masses of data, with a presentation of outcomes through graphics, instant reports, flexible simulations, strategic information, dynamic tables and others. Geiger (200) postulates Business Intelligence is the whole set of processes and data structure utilized for understanding the enterprise s business environment with purpose of supporting the strategic analysis and decision making. The principal components of BI are Data Warehouse, Data Mart, interfaces for decision support, and processes for data collection, which must be incorporated into a huge database and integrated into the business community. The major benefits of the BI environment, besides technical reasoning represented by simplification, global vision of consolidated data in a Data Warehouse, relate to the possibility of reasoning about the strategic questions from the organization and forecasting for its future through scenarios established in precise data from the present and past.

The executive seeks through Business Intelligence, to access and integrate development and tendency metric indicators, with different degrees of synthesis, capable of aiding them at the conveyance of the business. The present work analyses the theoretical and practical applications of the information system through matrix structure prioritizing the strategic variables from the studied case for posterior BI utilization. The fuzzy logic is seen as a concepts, principles, and methods system for dealing with reasoning methods which are more approximate than exact. It allows for the representation of intermediate pertinence values between the true and false values from the classic logic, enabling application at the construction of systems for describing of imprecise elements as solution of problems in the management area of large corporations, in Economy, Social Sciences, Psychology, etc. According to Oliveira Jr. (999), Fuzzy Logic is a set of methods based on the fuzzy set and diffuse operations concept, which enable the realistic and flexible modeling of systems. The diffuse set which may be named fuzzy set, was adapted with the intention of generalizing the ideas, which are represented by the ordinary sets, called abrupts or crisp sets in international literature. Such sets, which are as a variety of logic predicate and run through the interval [0,]. Espin and Vanti (2005) applied a fuzzy logic methodology and developed a system applied to strategic planning and to the Balanced Scorecard (BSC). Such system references the practical application of the present work for internal audit at the identification of strategic priorities. The benefits of utilizing the Fuzzy methodology for the decision making is that it can be structured in a developed system, thus considering possible answers of uncertain reasoning with the representation of possibilities in degrees of uncertainty (KLIR et al., 997, p. 28). The benefits of the fuzzy or diffuse logic, according to Mukaidono (200), are that in many cases, the mathematic process model may not exist or may be exceedingly "expensive" in terms of computing processing power and the memory and system based on empyrean rules may be more effective. IV. METHODOLOGY The quantitative-qualitative method of research was utilized as it provides a more detailed study of the issue in evidence. Richardson (999, p. 80) mentions that the studies which employ a qualitative methodology can describe the complexity of certain issue, analyze the interaction of certain variables, understand, and classify dynamic processes experienced by social groups. It is quantitative as it makes use, for data collection, of the establishment of values [0, to ] for the definition of the informational priorities, based on the fuzzy logic concept. Richardson (999, p. 70) emphasizes still that the quantitative research characterizes itself for the employment of quantifications in the conditions of information collection and their treatment by technical statistics to the same extent. It may still be investigative and descriptive, the first, for believing that there is little systemized knowledge in regards to the issue studied, and the latter for providing the observation, record, classification, and interpretation of the facts, with no interference from the researcher. As for the technical procedures, the research classifies as documental and also as case study. It is documental for utilizing internal documentation from the institution, which may be related to the objectives and issue researched. The case study, for being rich in details of a specific case analyzed, which can assist at the configuration of information for the field object of the present study. For the data collection, a few methodological stages were defined and may be seen on Figure. Stage Stage 2 Stage 3 Stage 4 Selection of the Unit of Analysis Analysis of institution s internal documentation Synthesis of Strategic Planning of the Institution Completion of SWOT Matrix Strategic Issues True Value - Categories Correlation between strengths, weaknesses, opportunities, threats, objectives, actions Identification of priorities for internal audit utilizing BI and Fuzzy Logic Researcher Researcher Interview Administration Pro-Rector System Figure Methodological Steps for Data Collection. The unit of analysis was the internal audit of a higher education institution located at the metropolitan region of Porto Alegre. This is considered an assistance agency to the endactivities and to management. It is a new sector inside the institution and it is in phase of structuring, lacking planning which may assist the auditors on the performance of their works with success. V. ANALYSIS OF RESULTS The internal auditors need to direct their work to what is most strategic and key to success

in the organization, otherwise they run the risk of auditing accounts which do not aggregate value to the undertaking, such as telephone calls control or other operational applications, where the expenditure may easily be limited via technological obstruction. They are result of efforts directed principally to the identification of frauds and error. The first stage performed was the analysis of the internal documents from the institution, and the second was the synthesis of its strategic planning which enabled the identification of Strong Spots, Weak Spots, Opportunities and Threats (SWOT) and Strategic Objectives, Actions and Initiatives (Balanced Scorecard). In possession of such information, an interview was carried out with the Administration Pro-Rector, where it was verified, in face of the organization s strategy, the priorities for the internal audit resulting from the complex information system processing. The interviewed attributed weights in scale of [0 to ], so as to establish degrees of truth for the questions, for example, how much is true to say that the strengths (tradition, ethical standards and credibility) relate to the opportunities, threats, and, at what level this is present at the institution. Likewise, one can identify if the proposed objectives and actions which were defined at the strategic planning, are in accordance so as to attend the purposes of the organization. The same criterion was adopted to correlate the threats. In this way, a value of truth and a respective category were established: 0 False: 0, Almost false: 0,2 Practically false: 03 Somewhat false; 0,4 More false than true; 0,5 As much true as false; 0,6 More true than false; 0,7 Somewhat true: 0,8 Practically true; 0,9 Almost true; e True. After the completion of the matrixes, we proceeded to the forth stage, where the data gathered upon completion of the spreadsheets were entered and processed in a computational system developed by Espín and Vanti, which allowed the identification of the value of truth of each intersection. The result of such processing is the importance of each variable (strengths, weaknesses, opportunities, threats, objectives, actions). Such variables were identified as of the completion of the SWOT Matrix added of more objectives with strategies and actions multiplied between them and fed by the institution s Administration Pro-Rector. So, the variables of which value of truth are between [0,8 e ] were considered, remaining thus identified the points of immediate concern so that the internal audit may define operational procedures so as to attend such priorities. DESCRIPTION IMPORTANCE CHARACTERISTICS OF THE ORGANIZATION Potential for attraction of qualified HR Capacity of incrementing partnerships Opening for changes CHARACTERISTICS OF THE ENVIRONMENT Inter-institutional relations Distance learning 0,8323 STRATEGIC OBJECTIVES Achieving excellence at education for all fields, levels, and modalities Promoting growth and expansion in and out of the headquarters ACTIONS Product innovation Qualification of management 0,8992 Sustainability 0,8944 Table Quantitative Identification of Proprietary Spots for Internal Audit. With such results, the informational priorities were identified so as the internal audit of the institution object of the present study may define its work plan so as to attend and work in accordance to the enterprise s strategies. VI. CONCLUSION The present study configured itself as an informational analysis to define priorities for internal audit through complex information system processing. Such system was based on fuzzy logic and BI. The first to priorize the most important strategic variables within the studied institution and the latter so as to then apply in databases, normally denominated Data Warehouse (DW) where it is possible to perform intersection of necessary information so as to detect frauds, errors and other non expected and possible behaviors in organizations of considerable size. The information having priority for the internal audit work allows the auditors to define, on their work plan, operational procedures which may be developed in face of the strategy of the institution. It is believed that with the results from the data processing the IES may then better

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