RiskTech Forum

Trintech: Restoring the Rhythm of Finance™ to Controls Assurance with Compliance

Posted: 5 February 2014  |  Source: Trintech

The Record to Report (R2R) process is the bedrock of financial reporting, financial risk management, strategic reporting and decision making. Weaving its way through the entire organization, the R2R process enables the collection and delivery of trusted information and is relied upon by internal and external stakeholders to give a true and fair position of the business. It is the de facto foundation of ‘financial governance’.

Underpinning the robustness of financial reporting is the controls environment. Internal auditors, external audit firms, management, regulators and investors rely on the integrity of the controls environment in order to draw confidence that risks are appropriately managed, the business is compliant with financial and other regulations, and that financial results are dependable.

“A robust system of ICFR [Internal Control over Financial Reporting] is important not only for reliable financial reporting but also to facilitate effective auditing.” SEC Commissioner Luis Aguilar, Dec 2012

Yet according to one authoritative survey1, even though more than 90 percent of CFOs believe they have established a governance framework to manage risk, less than a quarter are truly confident that key controls are operating effectively.

At the same time, finance costs rose by around 10 percent2 between 2010 and 2011, driven largely by factors such as business complexity, globalisation and compliance. As a result, finance functions are spending more on financial controls than ever before. In 2011, the percentage of finance effort dedicated to controls rose to 16 percent (up from 14 percent in 2010).

Yet the notion that more compliance inevitably leads to higher finance costs is misplaced. Finance organisations that rate highest in PwC’s benchmark for controls operate at a lower cost.

It is clear that existing approaches to financial governance based on loosely coupled suites of ERP/CPM applications, spreadsheets and collections of niche applications sourced from multiple vendors are not delivering the ‘goods’. The analyst firm Gartner says2 that these applications can address a company’s specific tactical needs, but do not provide a solution to the overall problem. So is there a better way?

In this white paper, we explain how “Compliance,” a key element of the Cadency™ financial governance solution, addresses the management of financial and other controls in the context of a unified environment designed to deliver process visibility, control, adaptability and confidence to the entire R2R process.

Please register or log in to download the report.