Gaining business advantage through controls excellence

Business advances that have offered growth and opportunity in the recent past have also delivered unforeseen consequences. One consequence has been the rise in inefficiency in most major businesses as information systems and processes have been adapted to meet increasing complexity and transaction volumes.
At the same time there are areas that have not escaped the relentless search for cost savings. This has put further pressure on the efficiency and effectiveness of business and financial reporting processes and wider business control.

This paper explores a proven approach to identifying and reducing those inefficiencies and increasing effectiveness by understanding end-to-end processes and the use of controls over them.

Recent Sarbanes-Oxley s404 projects have offered unprecedented insight into how businesses operate their internal control environments and where common opportunities lie for improvement in the financial reporting arena.

Building on this will undoubtedly lead to wider improvements in the way businesses are managed in the pursuit of shareholder value. SEC registrants are now starting to exploit some of these opportunities.

By taking advantage of the detailed insights they have obtained into their systems and processes (insights that go far beyond anything that compliance with Turnbull has delivered in the past), these companies are deriving real business benefits.

Companies are beginning to recognise from this experience that if internal control is fundamentally challenged and then redefined in a business, the resulting performance improvement will offer a return on investment beyond the reduction in risk it was designed to achieve. This document explores some of these areas of return.

But s404 has been expensive. What is more, most s404 projects to date have only addressed financial reporting risks, ignoring operational and regulatory risks, and have not yet looked more widely across the business to where major opportunities lie.

Many companies have yet to focus on these wider improvement opportunities and have so far only seen compliance as their objective. Our paper explores two questions:

• Are your control activities paying their way beyond their internal control mandate?
  
• How can you use the wealth of information from your control activities to better manage and improve performance in the business?