Is your control environment costing too much?
What’s the fix?
Implementing a single, overarching controls strategy can re-shape the control environment so that it is flexible, more supportive and more cost-effective.
During the discovery phase, the use of diagnostic tools can flush out the key areas of focus and the opportunities for improvement.
For many organizations, three opportunities typically arise:
- Reducing the cost of controls and eliminating duplication using a zero-based controls approach
Leading organizations are now looking at their ERP systems to determine how to reduce duplication and its resulting costs, extend the value and get a better return on their investment by automating and leveraging controls that will help the organization achieve strategic competitive advantage. Controls that hinder the organization’s ability to be nimble and to adjust to changes in the competitive landscape will lock finance resources and costs into non-value-adding activities.
By ensuring a positive return on investment, these organizations have been able to reallocate resources that were used for compliance purposes to forward-looking competitive purposes instead.
- Speeding up the financial close process
Significant reductions in the financial close timeline have been achieved when leading organizations look at and address the gaps and barriers in the current management and financial reporting processes and their critical paths.
By removing the barriers that impede controls and processes, senior management can achieve greater control efficiencies that could, for example, reduce the record to report cycle by two weeks.
- Reducing the costs associated with the external audit by looking through the audit lens
Organizations that have undertaken a controls transformation to improve not only their controls, but also the processes that the controls support, have experienced reduced efforts by external audit. In turn, these companies have realized an overall sustained cost savings.
The automation of controls can also reduce duplication and align the right controls to support the risk appetite, enabling external auditors to significantly reduce the level of control testing by testing only the right controls!
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