Clarity. Certainty. Confidence. CONTINUOUS CONTROLS MONITORING Support Regulatory Compliance Improve Cost Management Drive Operational Performance
Executives today are more challenged than ever to make quick, well-informed decisions that address increasing business complexity and regulatory requirements. Close examination of the business transactions underlying financial reporting is needed to uncover unforeseen risks, potential control breaches, and opportunities for operational improvements. ACL Continuous Controls Monitoring (CCM) provides this critical insight. Built on powerful ACL technology, CCM solutions extend best practices in controls compliance and transactional analysis into core business processes. ACL CONTINUOUS CONTROLS MONITORING ACL CCM solutions provide an independent control review mechanism to help organizations assure the effectiveness of internal controls, reduce operational risks, minimize profit erosion, and mitigate the risk of fraud, while meeting increasing regulatory requirements. CCM controls tests have been designed to support the COSO (Committee of Sponsoring Organizations) Enterprise Risk Management Framework, recognized as the standard for enabling compliance with Section 404 of the Sarbanes-Oxley Act. CCM solutions identify errors, fraud, and inefficiencies by independently checking and validating transactions against specified control parameters and business rules. Summary reports, available through an intuitive browser-based user interface, provide the opportunity to drill down to specific exceptions and transactions. Management and business process owners receive timely notification of control breaches, can quickly review quantified exposure of business risk, and investigate and resolve potential problems before they escalate. As a result, organizations can better support compliance, contain costs, and minimize losses. Strategic Operations Reporting Compliance Supported by ACL technology Internal Environment Objective Setting Event Identification Risk Assessment Risk Response Control Activities Information & Communication Monitoring COSO ENTERPRISE RISK MANAGEMENT FRAMEWORK Control objectives addressed by CCM analytics across key business processes: Authorization Accuracy Completeness Validity Efficiency & Effectiveness Segregation of Duties Regulatory Compliance ACL CCM solutions address controls and business challenges within core financial and operational processes. CCM application modules include: General Ledger Order-to-Cash Cycle Payroll Purchase-to-Payment Cycle Purchasing Cards Travel & Entertainment Expenses
SUPPORT FOR SUSTAINABLE SARBANES-OXLEY 404 COMPLIANCE Section 404 of the Sarbanes-Oxley Act requires management certification and external attestation that the internal controls and procedures underlying financial reporting are effective. Continuous monitoring of the controls governing financial transactions provides an increased level of assurance and confidence to management, auditors, board directors, shareholders, and other key stakeholders. ACL CCM solutions automate internal controls testing in key financial and operational processes across the enterprise through transaction analysis from any source. Organizations gain independent, comprehensive assurance of the effectiveness of internal controls and support sustainable compliance, year after year. GOOD GOVERNANCE IS GOOD BUSINESS While regulatory compliance requirements may be the catalyst to validate controls effectiveness, best practices in corporate governance are also good business. ACL CCM solutions enable financial managers to closely review internal controls effectiveness, and provide immediate opportunities to realize cost savings, reduce operational risks, and improve business performance. In the past, internal controls were merely considered by auditors; now they will have to be tested and examined in detail. That process will add an important protection for investors because solid internal controls are the first line of defense against misconduct and one of the most effective deterrents to fraud. The current business environment continues to exert pressure on organizations to reduce expenses and inefficiencies while improving top-line revenue growth. Faced with a dynamic regulatory landscape, fewer resources, less time, and mounting demands from stakeholders to mitigate business risk, organizations must formulate strategies to contain costs, prevent fraud, safeguard corporate assets, and address revenue leakage. ACL CCM solutions provide value beyond meeting regulatory compliance requirements by enabling organizations to continuously test the integrity of transactions and rapidly identify and solve control issues before profit erosion impacts bottom-line performance. Benefits of ACL CCM Solutions Independent testing of controls through the review of 100 percent of transactions from any source Timely notification to management of control breakdowns an early warning system of compliance risk, enabling control weaknesses to be fixed before they materially impact financial results or are reported externally Improved fraud detection and reduction of business risk through identification of control gaps and weaknesses that can lead to error, abuse, and fraud Improvements to efficiency and effectiveness with potential to increase profitability by containing costs, minimizing losses, and improving revenue collection Extensibility to multiple end-to-end business processes with independent assurance of controls effectiveness and transaction integrity across the enterprise Sustainable compliance ongoing, automated internal controls testing that provides cost-effective support for compliance programs William J. McDonough Public Company Accounting Oversight Board Chairman
Financial Managers Business Process Owners Auditors The key attributes of ACL CCM technology include the ability to: Check and validate transactional data from any ERP (including SAP, Oracle, and PeopleSoft), mainframe system, or custom-built application, ACL CCM SOLUTION Present Results Identify Control Exceptions Test Transactional Data Access Data against organizations control parameters and business rules Rapidly analyze unlimited volumes of data, with seamless data access and aggregation from virtually any enterprise application, while maintaining data integrity Leverage powerful ACL analytics to identify suspicious activity, errors, segregation of duties issues, and exceptions that may be hidden within high volumes General Ledger Accounts Receivable Accounts Payable Payroll Other of transactions B U S I N E S S P R O C E S S A R E A S Receive prompt notification of control breaches, through an easy-to-use browser-based user interface ACL BUSINESS ASSURANCE ANALYTICS TECHNOLOGY With ACL CCM solutions, organizations can continuously test and monitor internal controls, embedding audit best practices into organizations day-to-day business operations. They apply automated, pre-defined analytics to critical control points, mapped to the COSO framework, within core business process areas. By comparing and analyzing data from multiple systems across the enterprise, ACL CCM solutions support efficient, independent testing of business transactions to identify errors, exceptions, and control weaknesses Management and compliance teams receive timely notification of control exposures within the enterprise and gain independent assurance of the integrity of transactions underlying financial reporting. Quickly review quantified exposure of business risk, and drill down to specific exceptions and transactions to resolve potential problems before they escalate The flexible nature of ACL CCM solutions also recognizes that every organization s controls and operational policies are unique even within common business processes. The analytic parameters can be easily fine-tuned by authorized personnel as circumstances change for example, when approval limits change, staff take on new or expanded responsibilities, or business risk profiles demand more frequent testing of key controls. ACL CCM technology provides management with an enterprise-wide approach to controls testing and compliance that is efficient, cost-effective, and sustainable.
The value of continuously monitoring and auditing controls has been discussed and experimented with for a considerable time, but two factors are now helping it to become standard practice. Specifically, enhanced computer technologies and the impact of legislative changes such as the Sarbanes-Oxley Act are serving to facilitate and accelerate the use of continuous monitoring approaches. The Honorable David M. Walker, Comptroller General of the United States and Chair of the Center for Continuous Auditing Advisory Board THE NEED FOR CONTINUOUS CONTROLS MONITORING Today the need for continuous monitoring of controls is more critical than ever. Financial managers face challenges that include the need to manage regulatory compliance, reduce financial process costs, improve revenue assurance processes, oversee outsourcing arrangements, and monitor cross-organizational business processes. All these point to the need to refocus on financial controls in business transactions. Clarity. Certainty. Confidence. Typically organizations implement a range of controls to detect and prevent significant errors, fraud, or inefficiency. However, in reality, no controls system is entirely effective. Manual controls break down as transaction volumes increase. The pressures of growing workloads and increasing business complexity can make it operationally expedient to circumvent controls. Controls available in enterprise applications may be overlooked or simply not implemented due to time, cost, and efficiency. Organizations are exposed to potential financial loss while management and audit run the risk of failing to maintain effective internal controls and meet the requirements of regulatory compliance initiatives (e.g. Sarbanes-Oxley Section 404). While data analysis technologies have been used successfully by internal audit to assess internal controls and identify transaction errors and exceptions, such reviews frequently take place long after the transactions have occurred, limiting management s ability to take timely and corrective action. The increasing costs of external audits and compliance reviews are pressuring organizations to find a cost-effective, reliable, and sustainable means of validating controls performance. There is an identified need for technology solutions that can automate the independent and continuous testing and monitoring of controls. Companies should not reinvent the wheel for SOX compliance... but rather make new technology investments to automate key parts of the process for repeatability, sustainability, and cost effectiveness... Key technologies can reduce the cost of SOX compliance upwards of 25 percent, as compliance has been a mostly manual, people-intensive process. AMR Research Decisions 2005
Enterprise Solutions for Controls Monitoring ACL Continuous Controls Monitoring solutions address controls and business challenges within core financial and operational processes that represent significant areas of potential business risk. The extensible CCM framework allows organizations to easily add application modules to gain immediate and comprehensive insight into control exposures across the enterprise. The ACL CCM product suite addresses the following core business processes: General Ledger Order-to-Cash Cycle Payroll Purchase-to-Payment Cycle Purchasing Cards Travel & Entertainment Expenses ABOUT ACL ACL Services Ltd. is the leading global provider of Business Assurance Analytics to financial executives, compliance professionals, and auditors. Combining market-leading data analysis software and professional services expertise, ACL solutions give organizations confidence in the accuracy and integrity of the transactions and the effectiveness of the internal controls underlying increasingly complex business operations. Since 1987, ACL s proven technology has enabled financial decision-makers to assure controls compliance, reduce risk, detect fraud, minimize losses, enhance profitability, and achieve fast payback. ACL Headquarters T +1 604 669 4225 F +1 604 669 3557 info@acl.com acl.com ACL delivers its solutions in more than 130 countries through a global network of ACL offices and channel partners. Our customers include 70 percent of the Fortune 500 companies and over two-thirds of the Global 500, as well as hundreds of national, state, and local governments, and the Big Four public accounting firms. 2006 ACL Services Ltd. CCM/B/E/230206 Printed in Canada ACL, the ACL logo, the ACL logo with the text Data you can trust. Results you can see., and Audit Command Language are trademarks or registered trademarks of ACL Services Ltd. All other trademarks are the property of their respective owners.