Internal controls are key to achieving organizational objectives. They are also critical to eliminating mistakes and preventing fraud.
The Association of Certified Fraud Examiners (ACFE) 2018 Report to the Nations on Occupational Fraud and Abuse found the most prominent organizational weakness that contributed to fraud was:
Strong internal controls should be a primary focus of every management team. The challenge is that this requires considerable effort:
This traditional approach to ensuring internal controls are effective is problematic:
If you think you could be doing something better with this time, consider better solutions...
Evolve your internal controls system. Get better productivity and stronger controls with Data Analytics & Continuous Monitoring systems that:
Where would your finance department use this technology? In nearly every process you have. How about to:
Test 100% of transactions in near real time, perpetually. Neither vacations nor vacancies impact the testing frequency. This enhances visibility into internal control exceptions to ensure that each one is investigated and remediated.
Reduce the cost of compliance with the move away from manual, periodic testing. Instead, allocate your staff to valuable analysis, remediation and preventative tasks.
More testing, done immediately decreases the risk of non-compliance. The ACFE's report found that frauds that last over 60 months are more than 20 times as costly as those caught in the first six months.
Implementing Data Analytics & Monitoring properly necessitates formal documentation & standardization of business processes. This by-product of the Data Analytics & Monitoring system provides several benefits. Standardized business processes are easier to teach when staff turnover occurs and easier to enforce.
F.H. Black understands municipal accounting. There’s a tremendous knowledge base within the company and they use that knowledge to come up with strategic recommendations that really help us leverage the software to our best advantage. (read more...)