The world has changed perhaps forever, but the need for financial close controls and has only increased. When the default is to work remotely and leverage automation where possible the need to implement more controls and control activities directly into the systems used is greater than ever before.
Best-practices and enablers for effective and efficient internal financial close controls.
How technology supports the execution of the controls and control monitoring.
Key takeaways from the EY closer to Excellence survey in regards to how high performing companies work with internal control over financial reporting.
Preventive and detective controls over the financial close process*
A solid internal control environment not only leads to more confidence in the numbers but also implies less time spent to get there. Many companies strive for a highly automated internal control environment, with a predominance of preventive controls.
There is a strong correlation between having a high degree of automated controls and having mostly preventive controls. When controls are performed outside the systems, the tendency is that they are mostly detective. An important part of achieving an excellent internal control environment is to use a risk- and materiality-based approach. An excellent internal control setup starts with an excellent — and continuously updated — understanding of the financial processes, in general, and the closing process specifically. This approach will ensure that all significant risks are identified, subsequently enabling the design of controls to mitigate the risks.
*EY Closing Excellence 2018 Report
Inka Liljeström, Finance Process Excellence Manager at EY Finland
Inka is a Senior Manager at EY Finland, specializing in finance process and organization transformation and finance operating model changes. She has gathered experience in leading and acting as an expert in many kinds of finance-related projects including finance process development and harmonization, internal control improvement, and system implementations.
Clive Jefferies, Product Manager at Aico Group.
With over 30 years of experience in finance and IT, Clive has in-depth knowledge of record-to-report accounting processes and intelligent automation solutions. Having worked for the likes of IBM and Microsoft as well as consulting large global companies, Clive holds the expertise on end-to-end financial close processes.