Faced with challenging financial conditions, companies have focused efforts on essential...

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Faced with challenging financial conditions, companies have focused efforts on essential cost-cutting measures, while also exploring opportunities in emerging markets and developing new products and services for this decade and beyond. With these challenges come tremendous opportunities, and out of the ashes of the financial crisis will rise stronger, more resilient companies. Unfortunately, during the challenging times, some employees become tempted to cut corners and engage in fraudulent financial reporting and fraud. At the same time, regulators, faced with increased scrutiny for their apparent shortcomings prior to and during the financial crisis, have increased investigative and enforcement efforts to combat a perceived growth in corporate fraud. Against this backdrop, companies must remain focused on building and maintaining a strong internal control framework. The best global companies of today and the future must make corporate integrity and ethics the centerpiece of their culture – permeating every level of the organization, from the board and senior management down to entrylevel employees in foreign subsidiaries. Focus must be placed not only on compliance with the law but compliance with the tenets of honesty, ethics, and highest levels of integrity. Creating such a culture is not easy, but must become a reality for any organization that hopes to compete on the global stage. Enron, WorldCom, and other huge financial scandals of the early twenty-first century suggested it was not enough to have good internal controls to prevent fraud. Rather, it 2 became clear that companies would need a more encompassing approach to identifying, assessing, and managing all risks, including fraud risks. The result was the development of an important tool by the Commission of Sponsoring Organizations of the Treadway Commission (COSO) for boards of directors and senior management to manage their entities’ risks, including fraud risks.
	
Document Preview: Auditing I — ACCT333 
 
Project – Spring 2017 
 
SUBMISSION DEADLINE:  
th 
SUNDAY 14 MAY 2017 
 
This project weighs 20% towards the overall grade of this course.  
Learning Outcome: Global Perspective 
Project Background: 
Faced with challenging financial conditions, companies have focused efforts on 
essential cost-cutting measures, while also exploring opportunities in emerging 
markets and developing new products and services for this decade and beyond. With 
these challenges come tremendous opportunities, and out of the ashes of the financial 
crisis will rise stronger, more resilient companies. Unfortunately, during the 
challenging times, some employees become tempted to cut corners and engage in 
fraudulent financial reporting and fraud.  
At the same time, regulators, faced with increased scrutiny for their apparent 
shortcomings prior to and during the financial crisis, have increased investigative and 
enforcement efforts to combat a perceived growth in corporate fraud.  
Against this backdrop, companies must remain focused on building and maintaining a 
strong internal control framework. The best global companies of today and the future 
must make corporate integrity and ethics the centerpiece of their culture – permeating 
every level of the organization, from the board and senior management down to entry-
level employees in foreign subsidiaries. Focus must be placed not only on compliance 
with the law but compliance with the tenets of honesty, ethics, and highest levels of 
integrity. Creating such a culture is not easy, but must become a reality for any 
organization that hopes to compete on the global stage.   
Enron, WorldCom, and other huge financial scandals of the early twenty-first century 
suggested it was not enough to have good internal controls to prevent fraud. Rather, it 
1became clear that companies would need a more encompassing approach to 
identifying, assessing, and managing all risks, including fraud risks. The result was the...

David · Accepted Answer

Student Name 
Course Name 
University Name 
4
th
 May-2017
Contents 
Introduction ..................................................................................................................................... 3 
Ongoing regulatory and business uncertainty ................................................................................. 3 
Requirement of investment ............................................................................................................. 4 
How does one reconcile? ................................................................................................................ 5 
Leveraging IT for proper disclosures and controls ......................................................................... 6 
Aggregation and Normalization ...................................................................................................... 9
Introduction 
Streamlining the financial close requires the reduction or elimination of bottlenecks during the 
close process. These applications allow superusers to undertake tasks that previously would have 
required specialized, IT-centric skills. For example, a common bottleneck that occurs during the 
financial close relates to the treatment of ongoing account map changes from local general 
ledgers to the consolidation chart of accounts. If corporate headquarters is responsible for all 
mapping, close delays may result when multiple operations submit their trial balances with a 
high number of new or modified accounts that require mapping updates. When this occurs, 
corporate headquarters and local reporting units often require additional communication and 
reconciliation efforts when time is most precious (during the close itself) to resolve these issues. 
Ongoing regulatory and business uncertainty 
With ongoing regulatory and business uncertainty, enterprises are searching for ways to improve 
their risk management programs. According to a recent survey of more than 800 audit committee 
and board members conducted by KPMG, the top challenge the company faces is the 
effectiveness of the risk management program. Yet, 42% of survey respondents report that their 
risk management program and processes still require "substantial work." 
1 
KPMG notes that the 
board members surveyed are increasingly focused on "key operational risks across the extended 
global organization — e.g., supply chain and outsourcing risks, information technology (IT) and 
data security risks, etc." To manage the diversity of these extended risks, organizations require 
an integrated approach to risk management. 
When crafting this new integrated approach, companies may look to employ a variety of 
different risk management methods. Some companies may look to utilize a "top-down" approach 
that will link their strategic planning efforts to the company's broader operational risk profile. 
Others may choose to focus on developing a "bottom-up" approach that is supported by 
https://www.gartner.com/document/3645368?ref=solrAll&refval=184120724&qid=dd6fa26c6fff8a135aebbbb9e48386e3#dv_1_is_everything
processes and data in individual segments of the business. However, just as any building requires 
a solid foundation and a strong infrastructure, effective risk oversight requires an integrated view 
that combines top-down and bottom-up approaches.  
Requirement of investment 
Over the past decade, companies have invested great amounts of money, time and resources in a 
variety of risk management initiatives. Much of that investment has been focused in specific 
areas, depending on a company's most pressing need at the time. Perhaps the company must 
comply with a particular compliance mandate, such as the Sarbanes-Oxley Act of 2002, or 
remediate a given control weakness due to a major data breach or IT security failure. Now, this 
patchwork of risk management solutions lacks the ability to provide a comprehensive 
understanding of a company's risk profile, and more importantly, it prevents organizational 
leaders from making informed business decisions. 
Financial consolidation applications can provide more intuitive mapping interfaces,

Faced with challenging financial conditions, companies have focused efforts on essential cost-cutting measures, while also exploring opportunities in emerging markets and developing new products and...

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