SarbanesOxley Act

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Sarbanes-Oxley Act

• SOX mandates focus on Data Quality Data
  Integration intended to improve the
  transparency, accuracy and integrity of corporate
  financial reporting.

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Sarbanes-Oxley Act

• To achieve SOX compliance the IT dept. must
• create effective reporting mechanisms
• provide necessary data integration and management
  systems
• ensure data quality
• deliver the required information on time

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Sarbanes-Oxley Act

• Sections 302 and 906 tie responsibility for
  financial reporting to management sign-off on
  mandated reports.
• Section 404 defines assessment of internal
  controls as managements responsibility to
  certify the procedures used to ensure effective
  financial reporting.

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Auditors must attest to this report!

• Evaluate design and operating effectiveness of
  internal controls over financial reporting
• Disclose all known control, significant
  deficiencies, and material weaknesses
• Disclose acts of fraud!

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In conclusion

• As mandated by the new laws Auditors can no
  longer rely on traditional methodologies to
  insure the integrity of systems and reliability
  of controls
• Auditors can demonstrate due diligence by
  utilizing a combination of data analysis and data
  mining tools.

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What is Data Mining

• Data mining is the process of revealing valuable
  information and discovering previously unknown
  relationships that exist in large amounts of
  data.
• The process complements standard statistical
  analysis to reveal patterns in data that
  translate into actionable information.
• Data mining sorts through the data and uncovers
  the critical information you need for strategic
  decision-making.

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SOX and Associated IT Requirements

• DATA INTEGRATION
• sec 404
• provide a search mechanism across structured
  unstructured data
• WizDoc is our solution

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SOX and Associated IT Requirements

• DATA QUALITY
• sec 302,906
• identify eliminate duplicates data
  inconsistencies
• WizSame WizRule are our solutions
• sec 404
• check customer vendor base against watch lists
• WizSame is our solution

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SOX and Associated IT Requirements

• REPORTING BUSINESS INTELLIGENCE
• sec 404
• what-if analysis, trend and historical
  performance analysis
• WizRule WizWhy are our solutions

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Data and Text Mining
WizRule
WizWhy
WizDoc
WizSame
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What We Do

• WizSoft develops and markets software products
  based on mathematical algorithms for the business
  sector in the following fields
• data mining
• data auditing
• concept-based search engines
• ERP

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Data mining Tools for Auditors

• Structured data
• WizRule
• WizSame
• WizWhy
• Unstructured data
• WizDoc for Office

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Data mining tools for structured databases

• WizRule business rules detector for data
  auditing performs a complex analysis of the data
  revealing inconsistencies, errors and cases to be
  audited (investigated).

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Data mining tools for structured databases

• WizSame duplicate records discovery, analyzes
  one data set, or compares records in two data
  sets and reveals similar records suspected as
  being duplicates.

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Data mining tools for structured databases

• WizWhy analyzer and predictor, determines how
  the values of one field (dependent variable) are
  affected by the values of other fields.
• The resulting model consists of a set of IF-THEN
  and IF-AND-ONLY-IF rules that describe valid
  associations between various values of the
  dependent variable and the values of other
  fields.
• On the basis of the discovered rules WizWhy also
  points out the main patterns and the unexpected
  rules and cases in the data.

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Example of Unexpected Rule

• (1) If BANK is Bank1
• Then DEFAULT is yes
• Rules probability 0.50
• (2) If AGE is 17.00 20.00 (average 18.61)
• Then DEFAULT is yes
• Rules probability 0.50
• (unexpected rule) If AGE is 17.00 20.00
  (average 18.61)
• and BANK is Bank1
• Then DEFAULT is yes
• Rules probability 0.05

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Plain English Statements

• if there is a 50 chance that a loan from BANK1
  will default and
• if there is a 50 chance that a loan made to
  someone under the age of 20 will default,
• then it is unexpected that if a loan granted from
  BANK1 to someone under the age of 20 has only a
  5 chance of default.

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In conclusion

• Auditors would want to investigate whether such
  unexpected rules are the result of spurious data,
  or whether they illuminate some underlying
  situation of which management was not aware.

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Data mining tools for unstructured data

• WizDoc for Office - concept-based search engine,
  is designed for a fast retrieval of relevant
  documents. The user enters the query in natural
  language, and WizDoc interprets the meaning of
  the words in the query and source text and
  finds the relevant documents.

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About Us

• Fully owned subsidiary of WizSoft Ltd. (1983)
• Headquarters in Tel-Aviv, Israel
• US office in Syosset, NY
• 30,000 customers world wide
• 170 employees
• 18 sales and services offices

• 516-393-5841
• www.wizsoft.com