CaseWare Feature Spotlight: Content Library
- Jamie Black
- CaseWare Feature Spotlight
- minute(s)CaseWare Working Papers is the first choice of finance professionals around the world for automating complex financial reporting. When spreadsheets are the problem, CaseWare's sophisticated features are the solution. We've developed this article series to outline many of these features for two reasons: so prospective users can appreciate all of CaseWare's power and to encourage existing users to maximize their utilization of the software. One of the CaseWare's features that will reduce time spent on the year end and yield better quality results is its Content Library. If you are used to maintaining your financial reports in spreadsheets, you know it is all up to you. You have to develop your own formats and content whenever there is a new pronouncement and you are responsible for updating and maintaining your own custom Excel worksheets forevermore. Rather than building your reports from scratch, you can leverage the power of CaseWare's platform for management and use of standard content. Major features include: Predefined & updated content - CaseWare Financials comes pre-packaged with extensive libraries of content that are pre-configured to use standard group codes. The library includes standard statements, schedules and hundreds of notes. There are different libraries (ASPE, GAAP, GASB & IFRS) and your annual software license provides content updates, providing you with tested and reviewed content to ensure compliance with new standards. Thus, when a GASB pronouncement dictates you need a new pension note, it is ready and waiting for you to insert into your financial statements. Add your own content - While the content library can certainly aid when a new report or disclosure is required, you can always add your own content to the library. This allows you to reproduce any existing statements or handle a special reporting requirement. Adding your content is simple and you can even integrate directly into the library's strong content management and organization features.
Rather than building your reports from scratch, yourself, leverage the power of CaseWare Working Paper's GASBE / IFRS / ASPE content library.
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Version 14 of CaseWare Financials Released
- Darryl Parker
- What's New
- minute(s)CaseWare Financials 14.00 Software: CaseWare Financials Prior Version: Financials 13.00 New Version: Financials 14.00 Release Date: August 23, 2016 There have been significant changes to the existing features. Here's a list some of the more noteworthy items: 1. For those reporting under GASB new cash flow worksheets by major/minor funds has been added: Statement of Cash Flows Proprietary Funds Non-major Enterprise Funds Combining Statement of Cash Flows Internal Service Funds Combining Statement of Cash Flows 2. New functionality in libraries: Tagging content to industries is now available for Template authors. See more… Content for additional statement areas can now be based on standard statement libraries. 3. DIY Tables Enhancements The Table Column Properties dialog now has a new Auto fit all columns option to redistribute column widths among remaining columns in a DIY table with skipped/hidden columns. See more… A new Switch entity/mapping selector locations option is now available to switch the location of the entity and mapping selectors in a DIY table.See more... The Replicate DIY table option has been expanded to support note and section libraries. See more... For a comprehensive list of new features and updates visit the CaseWare site here.
CaseWare Financials 14.00 was released last week. Here's a list of some of the prominent new features and major changes to the software.
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Wellington-Dufferin-Guelph Public Health Automates Financial Reporting
- Jamie Black
- Success Stories
- minute(s)Wellington-Dufferin-Guelph Public Health works to improve the health of 250,000 residents of Wellington and Dufferin counties and the city of Guelph with a wide range of health services and resources, including immunizations, dental care, parenting support services, travel information, and infectious disease control. With 230 employees spread across six locations and an annual operating budget of $27 million, Wellington-Dufferin-Guelph Public Health embraces technology and the efficiencies it can provide to enable it to devote more resources to its mission. CaseWare Working Papers and Financials are two pieces of technology the organization relies on to streamline their financial reporting. Working Papers for Municipalities “We implemented CaseWare in 2013,” recalls Shanna O’Dwyer, Manager of Finance for Wellington-Dufferin-Guelph Public Health. “My first year here at the organization I used Excel® spreadsheets - and a lot of them - to produce the annual financial statements. I remember being concerned through the entire cycle that something would get missed and not updated properly. It was a stressful time.” O’Dwyer had used Working Papers in her prior position with an accounting firm, so was familiar with the solution and its capabilities when she saw it in action at a Municipal Finance Officers conference. “I met F.H. Black & Company Incorporated at the conference and learned how they have successfully implemented CaseWare for dozens of municipal organizations like ours across Canada,” she says. “We determined CaseWare would be an ideal fit for us.” Professional Implementation The implementation went very well says O’Dwyer. “F.H. Black & Company was fantastic. They were highly organized and very methodical in their approach. They kept the project on schedule and saw that we were informed and involved throughout the process.” Wellington-Dufferin-Guelph Public Health also appreciated the easy access to members of the F.H. Black’s consulting team. “We are able to view their calendars online and book a time slot that’s convenient for us,” O’Dwyer says. “But if we have an urgent matter, they are always directly available.” Simplifying Complex Tasks After receiving training in the solution and the mechanics involved in generating the financial statement templates, O’Dwyer was able to create the organization’s templates herself. She then set about duplicating the prior year’s financial statements in Working Papers as a proof of concept. “F.H. Black & Company helped with the export of the trial balance data from our accounting system,” O’Dwyer says. “It’s complex data with many different departments, segments, and funds but with their help we got it done.” During the past fiscal year, Wellington-Dufferin-Guelph Public Health has made a number of changes to its financial statement layout. “F.H. Black & Company helped us modify the templates to meet our needs and we were good to go,” says O’Dwyer. “It would have been a nightmare to try to incorporate all those changes if we were still using spreadsheets.” In subsequent years, O’Dwyer anticipates the time savings that Working Papers will deliver will be substantial. “In a short time frame, we are able to produce accurate, consistent financial statements.” Quality, Confidence, and Control Using Working Papers has improved the quality of Wellington-Dufferin-Guelph Public Health’s financial statements and made them more consistent O’Dwyer says. “Before CaseWare, we were copying rows of data from our financial statements and dropping them into the spreadsheets. Now we establish the account groupings in CaseWare and it does the work for us. Changes made to the working papers flow to the statements so we are confident that it’s right.” Previously, Wellington-Dufferin-Guelph Public Health’s auditors would take the organization’s spreadsheet data and produce the financial statements for them. Now, the organization produces its own statements through Working Papers. “We feel we have much more control over the process now,” says O’Dwyer. Paperless Process O’Dwyer says the first year with Working Papers, the organization continued its practice of building a paper binder, but that they have now eliminated paper entirely. “CaseWare is so reliable and secure, and we are able to link various references to outside documents such as funding agreements, that we determined paper was no longer needed.” Streamline Quarterly Reporting Building on the successful roll out of Working Papers for its financial statement generation, Wellington-Dufferin-Guelph Public Health plans to expand the solution’s use to quarterly reporting. “We’re still doing this in Excel, and there’s no reason why CaseWare can’t be leveraged to help streamline this task as well,” says O’Dwyer. She concludes, “We are really pleased with CaseWare. It has proven to be a real asset to us, and the great support we receive from F.H. Black & Company makes it all the better.” Ready to learn more about what CaseWare® Working Papers could do for your organization? Join us for a free webinar.
Wellington-Dufferin-Guelph Public Health automates financial reporting with CaseWare Working Papers and increases efficiency, effectiveness & reliability.
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2016 CaseWare Working Papers: Talk to IT Now
- Darryl Parker
- What's New
- minute(s)On July 20, 2016 CaseWare Working Papers users started to receive email notifications that Working Papers 2016 was released and available for download. The annual release is much-anticipated, and for those of us who have been around the CaseWare world for a few years, perhaps somewhat routine. But the latest release email has some very important technical information that could have implications for your use of the software. If you ignore this and fail to take action, you could find yourself with a significant technical problem next year. We summarize the issues into two categories. 1) Today you WANT to be on 64-bit Windows Contained in CaseWare International's announcement was the fact that within a few months we will have a 64-bit version of Working Papers 2016 available to us!!! Not excited by that? It's a technical matter that your I.T. department will appreciate. For many years now we've all been using computer hardware that can hold and manage very large chunks of memory, but we've been using software that can't take advantage of it. With the replacement of our older 32-bit software with the newer generation 64-bit software, we'll be able to hold a lot more information in our computer's RAM. More RAM on your computer likely means more RAM for CaseWare which translates to better performance in certain scenarios and ability to store and process much larger data sets. To utilize the new 64-bit release of Working Papers you need to be running a 64-bit version of Microsoft Windows. If you are still on a 32-bit version of Windows, you will not be able to realize the benefits. 2) Next year you MUST be on 64-bit Windows In the email announcing the Working Papers 2016 version, CaseWare made an important statement that is especially important to people currently using a 32-bit version of Microsoft Windows. Starting with the 2017 release of Working Papers, CaseWare International will only offer a 64-bit version. No 32-bit version of the software will be available. If CaseWare International follows through with their currently-stated position, some of you may find yourself unable to upgrade to Working Papers 2017 until you get a 64-bit version of Windows. Start the Conversation with I.T. NOW In some organizations, especially large ones with dedicated I.T. departments, the decision to upgrade Microsoft Windows is a major one, and does not happen quickly. There is usually an extensive review, testing and deployment project that you should discuss with them NOW. Don't leave this conversation until you get that 2017 release email telling you that you cannot install the new version on your computer. A good way to start is to forward this blog post to your I.T. department right now. Want to provide I.T. with our recommended hardware configuration so you can use the 64-bit version of CaseWare? We wrote an article for just this purpose! F.H. Black & Company Incorporated will continue to follow this important development in the Working Papers ecosystem and update as we learn of changes.
Learn the significance of CaseWare's 64-bit announcement for Working Papers 2016 and 2017.
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CaseWare Feature Spotlight: Document Management
- Jamie Black
- CaseWare Feature Spotlight
- minute(s)CaseWare Working Papers is recognized as a global leader in the Financial Reporting industry. This is a well-deserved reputation. However, it's a mistake to think of CaseWare as "just" a report writer - it contains a huge number of features and tools to assist the entire financial reporting work flow. We've developed this article series to outline many of these features and demonstrate how to maximize your utilization of the software. Clients want to save time and they would love to lower audit fees. One of the many features of CaseWare that delivers these very benefits is often-overlooked: Document Management. Document Management When preparing a year end file, Finance needs to be able to support the values they are presenting, both for their own certainty as well as for the auditor. Note 6 to your financial statements says total receivables are $12,932,000 with a table showing the aging analysis. We must evidence the underlying accounts that comprise this total. The first line of your Balance Sheet (Statement of Financial Position for Canadians) presents your current year cash balance of $3,866,345. How can the auditor be sure this is correct? The answer is (of course), we provide documentation that supports these values. CaseWare Working Papers provides a completely customizable Document Manager for generating & collecting all the documentation you require. Below is part of a document manager we use in our presentations to represent a typical local government Document Manager: Automatic Leadsheets The first, most obvious type of support to a financial balance on a statement, schedule or note is a leadsheet. CaseWare's Automatic Leadsheets are maintained by the system and provide a detailed listing of all the G/L accounts that comprise a total. These leadsheets are automatically updated every time data is imported, journal entries are recorded or G/L accounts are re-grouped. The example below shows a lead-sheet that has been grouped into meaningful sub-totals which facilitate more detailed reporting in notes. Clicking on the + sign to the left of any of the subtotals shows all the G/L accounts that make up the total: These documents are incredibly important for understanding why a number is what it is. The second step for many balances is providing other supporting documents (bank statements, reconciliations, contracts etc.). Supporting Documents In the image above, we see a Receivable - Utilities account with a balance of $23,578. We know the auditor is going to need to see the lists of individuals / corporations that owe that money. This is likely easy to generate from your ERP system. With CaseWare, all you need to do is drag and drop it onto the document manager to ensure you have one central repository. CaseWare intelligently numbers the supporting document and makes it available to your team and your auditor (assuming you provide your CaseWare Working Papers file to them) for subsequent review. Placeholders You determined you needed to support Receivables - Utilities, went to your ERP system and printed the report. Very likely, you will need to support this amount next year too. CaseWare will maintain the list of required supporting documents. On any supporting document, mark it to "Roll Forward as Placeholder". When a roll forward is performed, CaseWare finds every document with this property, removes the current year's content and replaces it with a shell (a placeholder). These placeholders are clearly identified so you can find what support you still need to provide. And then you can hand the complete file over to your auditor, fully supported and referenced.
One of the CaseWare's unsung features is Document Management - the easy for Finance to support their reports.
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CaseWare Working Papers 2016 Released
- Jamie Black
- What's New
- minute(s)Software: Working Papers Prior Version: 2015.00.192 (Release 3) New Version: 2016.00.065 Release Date: Jul 20, 2016 A new version of CaseWare Working Papers was released last week. We recommend our clients schedule the update. Remember that once you open a Working Papers file in the 2016 version, it cannot be accessed using the older 2015 software. For this reason, all of your staff who collaborate on files in common should be upgraded at the same time. You may have received an email from CaseWare International announcing the release and inviting you to download the installation files. If, however, you do not have that email, contact the CaseWare Sales department at +1 (416) 867-9504 or sales@caseware.com to request your download. Details: This new version includes many enhancements & fixes: Enhancements related to: Fixes related to: Issues Copy Components Excel Export Check In/Check Out Annotations New File Adjusting Journal Entries PDF Export Mapping and Grouping Excel Export Year End Close Annotations Document Manager Calculations Connector Add-on Imports Automatic Documents Document Manager Calculations Automatic Documents Export Packager Interface Calculations Cells Cells Graphs Exports Look for more blog posts and Feature Spotlight articles from FHB in the coming weeks and months talking about the enhancements and improvements in the latest version of the software.
CaseWare Working Papers 2016 was just released with many fixes and improvements.
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CaseWare Feature Spotlight: Rounding Relationships
- Jamie Black
- CaseWare Feature Spotlight
- minute(s)CaseWare's financial reporting solutions provide massive benefits. Auditors in public practice, finance officers in government, and controllers in large corporations use CaseWare to automate their most complex financial reports faster, with fewer errors, and more reliably than with any other tool. How? By providing the most sophisticated features in the industry. Each of our "Feature Spotlight" articles discuss one of these features. Rounding Relationships Reduce Risk Rounding is a very challenging problem. We have discussed techniques for addressing it in Excel on several occasions. Because of the complexity and the frequency that accountants, auditors and finance professionals encounter rounding errors, CaseWare Working Papers provides a number of tools to solve this problem. In this post we'll review one of them: rounding relationships. In many scenarios (like the ones described here), differences can be expected. But typically the difference is an immaterial amount. To deal with this issue, we have CaseWare's Rounding Relations feature. Rounding Relations allows the end user to define an unlimited number of relationships to monitor and automatically resolve out-of-balance issues. To use this feature, all that is necessary is: Identify two cells to compare (Difference cells), identify a third cell (Plug cell) which, when adjusted, will cause one of the first two cells to change Set the maximum amount of the adjustment (Limit) Once the accountant has these options configured and enabled, CaseWare continuously monitors the cells and keeps them in balance. No computer programmer or external consultant required. We can even be a bit more sophisticated if we like. Using the Advanced option for the plug cell, we can specify a Plug Condition. The Plug Condition is the condition that makes this cell get skipped as the plug cell. That is, if the condition for a plug cell is evaluated to be true, the difference is not plugged to that cell and the next Plug Condition in the Rounding Relationship is evaluated. If the condition for a plug cell is evaluated to be false, the amount necessary to resolve the disagreement between the difference cells is plugged to that cell. Should the disparity between the "Difference cells" exceed the defined "Limit", CaseWare will immediately notify the end use of the problem complete with hyperlinks allowing you to jump to all the cells involved. This notification ensures discrepancies are not overlooked and allows the end user to investigate the cause and resolve the underlying issue. You're not forced to constant re-read the report, scanning for disagreements, and that directly translates into less time spent reviewing to ensure agreement. It also guarantees fewer errors in your reports. CaseWare Working Papers has multiple systems available to warn you of discrepancies and/or automatically fix them. Look for upcoming CaseWare Feature Spotlight articles to talk about how to get closer and closer to fully automated, agreed financial reports!
If reducing the risk of errors while decreasing time investment is your goal, the rounding relationship is one feature of CaseWare Working Papers you need.
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CaseWare Feature Spotlight: Modifiable Groups
- Jamie Black
- CaseWare Feature Spotlight
- minute(s)CaseWare's financial reporting solutions provide massive benefits to more than 500,000 users in 130 countries. Accountants, from auditors in public practice to finance officers in government, use CaseWare to automate very complex financial reports faster, with fewer errors, more reliably than with any other tool. How does CaseWare do this? By providing the most sophisticated features in the industry. Each of our "Feature Spotlight" articles discuss one of these features. Groups For a report of any sophistication, you need to group items (general ledger accounts, performance metrics etc). In fact it is typical that you need to combine those accounts in several different ways in a single report. For example one schedule may show expenses grouped by nature, and another schedule shows expenses grouped by department. Further, because you may want to generate reports that the software vendor might not have anticipated, you need modifiable groups. In other words, customizable by you and not require a consultant or the software vendor's intervention. All of this is true of CaseWare. CaseWare provides standardized groupings to simplify your reporting For example, CAFR groupings are provided in the GASB template. You can also modify or import your own groupings if you have them defined elsewhere. In fact, CaseWare Working Papers has this and more. 10 Groupings that can be named and organized any way you need (note Group 3 in the screenshot below called "Any Name I Want"). Each grouping can have 40-digit codes and 50-character names all specified by you. They also have some sophisticated features: Flipping - consider AR & AP. Imagine that this year one of your receivable accounts has a credit balance. No problem - in CaseWare you can configure the group code to automatically "flip" that account to the payables group code with no intervention from the user required! Calculation - Consider AR. Most often you will want to show receivables net of allowances for doubtful accounts. Not always though. Calculated groups allow you to instantly add other groups (the AR group and the Allowance group) together to get AR Net of Allowances. Extended & Calculated Descriptions - Need a longer description? How about changing the description automatically in the situation where the "Due To" becomes a "Due From"? Check & Check! Mapping has all the features of the above groups and a number of extra features too. Mapping allows you to default account properties and automatically assign any or all of the other 10 groups. Map numbers can be 40 digits long with 50-character names, all fully modifiable by the end user. Entity code - this mechanism is often overlooked by CaseWare users. Not only does it do all the work of the other 10 groupings but it also gives you a very simple way to create what Excel users call a pivot table. This turns out to be an amazing feature when trying to tackle complex governmental reporting (GASB / PSAB) or dealing with large consolidations. Entity numbers (called abbreviations) can be 40 digits long and the descriptions can be 100 characters long. If you are keeping track that is 12 concurrent grouping mechanisms that can all be customized and modified by the end user! PS: There are actually 2 more ways to combine accounts: Tax Export Code & GIFI. Both of these are used to automate the population of your corporate tax software (very useful for public accountants and accountants in large corporations). We have not counted these two as true grouping mechanisms as they are built for very specific purposes, and are not that modifiable.
Customizable groupings are key to saving time, reducing errors, reducing audit fees & improving the reliability of your reports. CaseWare has you covered.
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Best Practices for Financial Reporting - Eliminate rounding errors
- Jamie Black
- Excel
- minute(s)Complex reports (Financial statements / Comprehensive Annual Financial Report, Budget Book, etc) often present the same value in multiple locations in multiple ways. For example: on page 5 we show total revenue, on page 100 revenue is broken down by type, and on page 200 revenue is broken down by source. The trouble is, the value on page 5 and the total of the break-downs on pages 100 & 200 must all agree. The most common reporting tools (Word & Excel) do not have good methods to confirm and enforce that agreement (see how CaseWare Working Papers solves this problem here). You're left with a manual, error-prone process. The amount of detail provided in even a moderately complex report means rounding errors likely occur hundreds of times. This requires massive time investment during the reporting process to check & double check & triple check as your proceed through the reporting process. This article will explore just one of the common causes of disagreement between these values and suggest best practices to minimize failures of agreement. Different Rounding Approaches Lead to Disagreement As we have examined in our post Best Practices for Financial Reporting with Excel (Step 2), the optimal method for dealing with these 3 different revenue presentations is by linking back to central data source. We will assume you are following this advice. Let's use the following as our central data source (G/L): Approach 1 On page 5, where we just need total revenue we would enter a formula that adds all of the individual account values and rounds the result. Your page total 5 will show total revenue as $804. Approach 2 But what about on page 100 where we present revenue by type? The problem becomes apparent. When we need to present more detail, we round each individual account value and then add up those rounded values. Your page 100 will show total revenue as $801, which does not agree to the total of $804 presented on page 5. In other words the problem is we use different approaches to rounding: Approach 1 adds raw values and rounds the total Approach 2 rounds raw values and then adds them The Solution This problem may seem trivial: "Just link the values together!" For example, the value on page 5 might be a cell reference formula to the total of the revenue by type on page 100. As we discussed in our post Best Practices for Financial Reporting with Excel (Step 2) this causes other problems and only "solves" this problem in one location. It does not address the total on page 200 or any of the other locations that we provide break downs. A better way to address this problem is to attack the foundation of it; always use a single approach to rounding! We must choose one of the two approaches. Given that we must provide detailed disclosures which must be presented rounded to the nearest dollar in many locations we are forced to select the rounding model used in the detailed break-down schedules everywhere. So the recommendation is: If you must present detailed but also rounded disclosures, round all account values in your report and then add them. Thus the value on page 5 becomes $801 which will agree "per-force" with all other presentations. By following this model you will immediately eliminate all of your "true" rounding issues. In coming articles we will discuss some of the other causes of disagreements.
Many finance departments use spreadsheets where rounding errors are a continual struggle. This article presents best practices to minimize rounding errors.
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In Control: Internal Control - More than Just Segregation of Duties
- Holly Ueland
- In Control
- minute(s)We strike up conversations about all manner of topics with finance professionals across North America, but discussions about Continuous Controls Monitoring (CCM) can be difficult. In part it is challenging because not many of us have extensive experience with Internal Control. For example, on numerous occasions we've heard comments like “Yes, our internal controls are great; we have segregation of duties!” With this in mind, and in consideration of the problems that a weak system of Internal Control causes, we thought we would explore some of the basics in this post. Perhaps the simplest way is to use an analogy: Imagine you are driving in your vehicle. Your objective? To safely get to the grocery store and back, taking the most efficient route possible. On your route, there are risks - other vehicles, pedestrians, traffic lights - which threaten to slow you down or even derail you completely on your journey. But you're not powerless. Your car has a number of features that allow you to navigate these dangers - the mirrors, the steering wheel. the turn signals, etc. The skillful use of these features can greatly increase the likelihood of you getting to the grocery store. More than just Segregation of Duties Imagine you climbed into your vehicle and all you found was a brake pedal - no steering wheel, no turn signals, no headlights.... Would you start off on your trip? Most likely not - a single safety feature is not enough! You need a wide array of components working as an integrated system in order to have a safe and efficient trip. Your organization's internal control system is the same. Segregation of duties is an important component (see Control Activities below) of the system. But it alone is not enough to protect your organization and ensure the attainment of your goals. What is needed is an entire framework of internal control. There are a number of different frameworks but the most popular and the one recommended by the GFOA is COSO. Below, the COSO pyramid illustrates the components of a their framework: Control environment This is often referred to as “tone at the top” and represents the many elements of the internal environment that define how the entity will conduct its activities overall. These include “soft controls” such as shared values, high ethical standards and expectations, and openness. However, it also includes “hard controls” such as formal job descriptions and performance reviews, and enforced disciplinary practices for violations from expected behavior. It is hard to over-estimate the importance of this component. In fact, in January of this year the GFOA published a best practice regarding the control environment we strongly encourage you to read. Risk assessment Risk is defined as an event that will impact the achievement of one or more objectives. Risk assessment involves the identification and assessment of likelihood and impact of relevant risks. Control activities Control activities are those actions carried out to mitigate risk in order to increase the likelihood that objectives will be achieved. Generally they break down into two categories: Preventative & Detective. Preventative: Authorization and approval: These activities provide the go-ahead to act on the entity’s behalf. A common example is purchase approval limits, whereby individuals can commit up to a specific amount of the organization’s funds to obtain goods and services. Physical controls: This includes activities that ensure the physical security of assets, such as pass cards to restrict building access to only authorized personnel. Detective: Verification: Verification assists in determining if a transaction is legitimate and based on valid information. For example, ensuring that purchases are made only from approved vendors. Reconciliations: The most common type of this control is bank account reconciliations. However, any activity that ensures two or more types of information agree can be defined as a reconciliation, such as a 3-way match between a purchase order, receiving documents and the invoice received from the vendor. Here we see the role of segregation of duties. It is an example of one type of control activity (preventative). It involves separation of the responsibility for the various aspects of a transaction – initiation, custody, recording and reconciling. For example, separating the approval of a purchase (initiating), the ability to create a purchase order (custody), actually creating the purchase order (recording), and performing the 3-way match mentioned above (reconciling). Information and communication Communication is the glue that holds this system together. Information is obtained both from internal activities, such as transaction data, and external sources, such as regulatory requirements. Appropriately and effectively communicating information across and outside the entity is essential for the achievement of objectives. Monitoring How do you know the control activities you are counting on are present and functioning? This is the role of monitoring. Unfortunately it is all-too-frequently overlooked. Your control monitoring system can either be based on manual effort from staff, or automatic checking from one of your computer systems. The other important aspect of your monitoring system is its frequency: periodic or continuous. Manual monitoring very rarely approaches continuous unless you have the resources for MANY dedicated internal auditors. It's much more likely that it will be periodic. Your automated monitoring protocols are more likely to be continuous, although the way you implement them will determine their frequency. Monitoring tends to be one of the weakest elements in most organization's internal control structure for two reasons: Time-intensive: Let's say your organization processes 12,000 A/P disbursements per quarter and you are worried about duplicate payments. To ensure your control activities are working (monitoring), you need to find over 600 randomly sampled disbursements. Once you have this random sample, you now must find and review all the supporting documentation to ensure that there are no duplicates. For most organizations this is several weeks of work. Ongoing: You need to monitor all the time. The more infrequent the monitoring, the less confidence you have that your control activities can be relied on to mitigate risk. If you spend weeks of time looking for duplicate payments, how likely are you to tackle monitoring of duplicate payments every quarter? For most of us, we don't have the time available to dedicate to this rigorous of a protocol, despite how high-risk this area is. Improve Your Framework of Internal Control It should be clear now that breaking some high-risk tasks into a pieces and segregating them among different staff is just one small (but important) piece of an effective internal control system. But it's not nearly enough. Developing a proper framework involves much more, and relies on a robust, continuous monitoring program in order to safely "drive" your organization to your objective. Click the image below to learn more about how to ensure a more efficient, effective and organization.
Understanding internal control components is essential for finance officers & is the first step in understanding the benefits Continuous Controls Monitoring CCM
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