Risk assessment system can more easily and effectively examine financial reporting activity in a company’s general ledger
CHICAGO, October 19, 2021--(BUSINESS WIRE)--Grant Thornton LLP has been awarded a patent by the U.S. Patent and Trademark Office for innovations related to the firm’s proprietary Whole Ledger Analytics system.
Grant Thornton created this system to significantly enhance general ledger analysis by assessing risks related to each financial reporting transaction. The firm began developing Whole Ledger Analytics over four years ago and has incorporated it into the majority of its audits. Not only does this approach foster continuous improvements in audit quality and efficiency, it also yields unparalleled insights for clients.
Whole Ledger Analytics allows Grant Thornton’s auditors to more easily and effectively examine a client’s financial reporting activity and identify higher-risk transactions, human errors, and reporting trends. It also identifies process improvement opportunities, such as automating manual reporting activity and accelerating the time-to-close process.
The patent — U.S. Patent No. 11,132,698 ("System and Method for General Ledger Flagging") — protects and recognizes the firm’s analytic techniques for flagging entries in a company’s general ledger. These techniques look beyond dollar amounts and descriptions by computing transaction risk scores, analyzing digital and textual trends, and comparing the frequency and nature of accounts used by a company across multiple periods. More specifically, the techniques also look at the words used to describe the transactions, the relationships among the transactions, and the prior history of transactions for the business.
"At its core, Whole Ledger Analytics allows auditors to perform a better and more robust general ledger analysis by considering dozens of separate risk factors across millions of journal entries simultaneously," said Brian Wolohan, partner-in-charge of Audit Innovation at Grant Thornton. "Our pioneering approach to innovation continues to provide our clients with higher audit quality and better insights across their organizations, and this patent exemplifies that."
As described in the patent, Whole Ledger Analytics takes several unique approaches to general ledger analytics, including:
Transactional scoring — A technique that computes a composite risk score for each transaction on a general ledger based on the presence or absence of 38 scoring indicators.
Account combinations — A methodology that identifies every unique combination of general ledger accounts to visualize the top account patterns, rank patterns according to potential risk, and highlight notable combinations.
Digital and text analytics — An approach that analyzes transaction amounts and descriptions by evaluating digit and letter usage to identify unexpected or unusual activity.
Benchmarking — A technique that compares more than 200 benchmarks around financial processes, including the value, volume, and timing of entries.
A year of patents and awards
In addition to its patent for Whole Ledger Analytics, Grant Thornton received another U.S. patent in June 2021 for innovations related to the firm’s controls-test automation app, cta.x. The app helps companies comply with laws and regulations, such as Sarbanes-Oxley, by making it easier for them to rapidly develop, deploy, and execute automated internal controls tests.
These two patent awards follow a strong showing at the 19th Annual American Business Awards® competition, where Grant Thornton took home five Stevie® Awards for its leadership and work in innovation and positive disruption.
"These patents and awards are the result of our entire firm’s commitment to emerging technology and innovation," said Chris Stephenson, national managing principal and Grant Thornton’s leader of Product Innovation. "We are proud of the results our mindset is achieving: Whole Ledger Analytics and cta.x are bringing incredible benefits to our clients and helping Grant Thornton lift the accounting and consulting industry."
For more information about Whole Ledger Analytics, visit www.grantthornton.com/auditinnovation.
About Grant Thornton LLP
Founded in Chicago in 1924, Grant Thornton LLP (Grant Thornton) is the U.S. member firm of Grant Thornton International Ltd, one of the world’s leading organizations of independent audit, tax and advisory firms. Grant Thornton, which has revenues of $1.97 billion and operates more than 50 offices, works with a broad range of dynamic publicly and privately held companies, government agencies, financial institutions, and civic and religious organizations.
"Grant Thornton" refers to Grant Thornton LLP, the U.S. member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. Services are delivered by the member firms. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s acts or omissions. Please see grantthornton.com for further details.
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