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合规财务税务和会计19 二月, 2021

Knorr-Bremse AG & TeamMate+ Audit

Knorr-Bremse’s reputation depends on technical excellence and reliability, so its internal audit team needed a solution that could help them stay one step ahead.

Rapid response

Technical excellence and reliability are integral to the ethos of Knorr-Bremse, which has been developing and manufacturing braking systems for rail and commercial vehicles for more than 115 years. The company’s internal audit function must therefore provide a similarly innovative, efficient and reliable service to offer assurance across the whole organisation. No easy task for a company that has grown by acquisitions and has 160 auditable locations with a varied systems and processes – and a slim audit.

The company now has ambitions to take its auditing and controls framework to a new level. Philipp Bauer, head of internal audit, plans to introduce more predictive auditing and to combine internal audit and risk and controls data to create a single system for the risk and controls framework and ensure consistency across the organisation.

“The main issue is to find a common language so that we can talk to each other effectively. We want to be able to spot an issue in, say, petty cash, and be able to come at it from both the internal audit and controls angle and use all the available data from all sources,” he explains.

These ambitions are spurred partly by ongoing initiatives to align risk, controls and audit across the different organisational entities, and by new regulatory requirements introduced as a result of its flotation on the stock exchange in 2018. Since Bauer took over the internal audit department four years ago, he has worked to develop the company’s second line assurance capabilities to free internal audit up to offer more services more efficiently.

“The people at the coal face are doing their jobs well and the third line is also operating effectively, but the second line has not played such an important part in the past and internal audit has often stepped in to help make processes work better and standardise them,” Bauer explains. “Now we are listed, we need to improve the way the second line provides assurance. Internal audit used to go into offices to talk to people at their desks. Increasingly, our focus is on integrated assurance, so we are going to the second line to identify what assurance they can offer. The work we are doing is similar, but the focus has shifted.”

Automated connections

The company adopted TeamMate AM in 2014 to automate its auditing processes and enhance consistency. Stefan Kwass, Internal Auditor, was brought into the team to use his experience setting up and running service centres and his expertise in rolling out new technology.

“I’m not from a traditional audit background and I was invited into the team because of my operational experience in the business,” he explains.

Much of my work has involved optimising processes and when I came into internal audit, I found that a lot was still done on spreadsheets. We needed to change. We chose TeamMate because we felt that our values aligned closely – entrepreneurship, technical excellence, reliability, passion and responsibility were important to all of us.
Stefan Kwass, Internal Auditor at Knorr-Bremse

“From the first minute, I could see that TeamMate fitted the needs of our internal audit department,” he adds. “It was important that we could all use the new system and run it ourselves, because we are a small team and could not allocate one team member to be a software administrator.”

This need for simplicity and direct control was one reason why the company adopted TeamMate+ last year. “TeamMate AM had to be stored on our servers. We tended to skip some of the software releases and only updated it every second or third release, because we had about 1,000 applications, so this was complicated,” Kwass says.

We moved to TeamMate+ in February 2020 and chose the version hosted on the cloud. In one of our team meetings, I compared the new system with what we expect from mobile phones – the updates appear automatically, and we look forward to them because they always bring improvements and changes that are useful and immediately obvious.
Stefan Kwass, Internal Auditor at Knorr-Bremse
TeamMate+ has this facility, so all we had to do was to start using it. And the dashboards allow us to combine the forces of corporate governance (compliance, internal controls and risk management) clearly and to do more predictive risk-based auditing.
Philipp Bauer, Head of Internal Audit at Knorr-Bremse

Future aspirations

Like many internal audit functions, the team at Knorr-Bremse is keen to increase its use of data analytics and to adopt more agile processes, so it can respond faster to changing events and produce more timely, relevant reports. The company already uses data analytics in parts of the organisation and internal audit taps into these systems during audits, but Bauer hopes to start flowing this data directly into the internal audit system in future.

He also wants to use data to plan audits, rather than just to inform those already in progress. This will feed into wider changes to audit planning; moving from annual to quarterly plans conducted on a rolling basis, and building a risk database that will “steer” the plans for the following quarter.

“Other parts of our organisation are using more agile techniques and we may well move in that direction in future,” Bauer says. “We are looking at creating more dynamic surroundings, moving faster to react to circumstances and rapid reporting. This requires a more agile mindset.”

New dimensions

In particular, he is keen to move from conducting time-consuming audits on entire corporate entities to doing shorter audits on specific areas, such as accountancy, or operations across entities or regions. “In the past we would spend a week preparing an audit, then travel to that entity and conduct the audit, and then come back to write up the report. This was tough on a small team and to be more agile we have to break these audits into smaller chunks,” he says.

He intends to use the dimensions capabilities of TeamMate+ to focus on audits across entities and functions. “The dimensions facility helps us to look across the organisation at areas that are similar, and at different auditing areas such as processes, regions, locations and cities, rather than on our existing audit entities,” Bauer says. “It will help us to audit, for example, accounting across three entities in one city or a region. It should mean that we can focus on places where something is burning, rather than doing an audit just because it’s business as usual.”

One question he is frequently asked by senior management is how they can get standardised information so they can see what’s actually going on across the business. “Sometimes we see the same issue in 10 places, but we may not link these quickly if the audits are conducted by different people in different places at different times. This system should help us to spot issues faster and to cross-reference the information to identify whether it’s part of a larger pattern. It should help to standardise what we are seeing and what we are reporting,” he says.

Kwass believes that adopting TeamMate enabled the audit team to conduct 25-33 per cent more audits each year, because of reduced admin time and increased integration. The developments enabled by TeamMate+ should increase the speed and efficiency of audits still further – while also increasing their impact – which is essential if internal audit is to keep up with changes taking place in the wider organisation and the emerging needs of management.

For auditors who are challenged to improve audit productivity while delivering strategic insights, TeamMate provides expert solutions, delivered with premium professional services, to auditors around the globe and in every industry.

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