1. Perform Assessment with current and future internal controls strategy
Reperform assessment with current and future internal controls strategy is the first thing that should be done on cost reduction strategy.
2. Limiting the number of key controls
(i.e., the controls that have to be tested) by adopting a top-down, risk-based approach that focuses on controls that will prevent or detect material errors. Companies and external auditors have historically tested controls that are not key under this definition: that they are required to prevent or detect material errors. Controls that are not likely to result in material error should not be considered “key” and do not need to be within management’s scope for Section 404.
3. Using the top-down approach to identify direct entity-level controls
(e.g., month-to-month payroll variance analyses performed during the period-end close process) that provide reasonable assurance that a material misstatement due to a failure in controls within the business process (e.g., within payroll) would be detected. In this situation, it may be possible to remove any business process controls from the scope of work. (more…)
Popularity: 16% [?]
Chief Audit Executives (CAEs) can use this checklist to examine their IT control framework to ensure the organization has addressed all control elements. The checklist can help the CAE understand the issues and plan for full internal audit coverage of the control areas.
Download
Popularity: 23% [?]
Financial Literacy
All members of the committee are “financially literate.” If not, lack of literacy is due to recent appointment to the committee, and appropriate steps are planned and underway to develop literacy.
Financial Expertise
At least one member has accounting or related financial management expertise.
The board has determined whether at least one committee member meets the definition adopted by the SEC of an “audit committee financial expert.” The name of the “audit committee financial expert” is disclosed in the proxy. If more than one committee member meets the definition, the board considers whether to name more than one person in the proxy.
Download
Popularity: 28% [?]
Increased shareholder value: A properly functioning and documented governing framework can provide corporate leaders with an increased sense of security as they reflect on the efforts they are making toward managing compliance and risk issues. Governance can also provide reassurance to those outside of the company by demonstrating the organization’s capacity for understanding the need to manage risk and compliance issues as well as its ability to institute a functioning GRC system. The result can be measured in the strengthening of the company’s brand and reputation, which translates into stronger shareholder value.
Lower overall costs: A unified and holistic approach to GRC also helps to lower the overall yearly costs to managing a company’s risk and compliance activities. For example, a GRC approach increases efficiency, allowing a company to reduce the number of people dedicated to this function and the number of hours required to carry out risk and compliance duties.
Improved financial performance: A strong governing framework facilitates transparency, giving company leaders a logical and structured process to proactively and more effectively address risk scenarios and compliance issues. Further, by providing the tools to mitigate risk and manage compliance, companies can reduce performance variability and increase overall financial performance. (more…)
Popularity: 10% [?]
Governance guidelines, which are the policies and rules of the game for a company that explain how the company will be run to best meet its obligations and pursue the business strategy, are set forth by senior management. The operational executives then carry out programs and put in place controls that ensure compliance, frequently with the help of consultants or auditors who are expert in applying GRC. Risk management results in the creation of mechanisms so that risks can be brought to the attention of senior managers who then take steps to reduce them.
Popularity: 11% [?]