Components of an Internal Controls Enforcer

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Components of an Internal Controls Enforcer
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Jon Gearhart, Solution Architect Oracle
Corporation March 22, 2007
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Sarbanes-Oxley Adds More Complexity
Statewide
Agencies
Process 1 Cash Receipts
Financial Item 3 Allowance
Financial Item 2 Inventory
Financial Item 1 Cash
Auditors
Auditors
Auditors
C-Level
Bus. Managers
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Then Theres the Financial Burden
Initial Costs
Recurring Annual Costs
The real cost of Corporate Governance and
Sarbanes-Oxley is the opportunity cost. Im
swamped, spending 80 of my time on these issues.
And, certifying internal controls is not a
straightforward task. Its time Im not spending
on operations and on growing the business. CFO,
Fortune 500 Energy Company
2.8 - 8 million
3.5 - 9.5 million
Source AMR Survey of 1,000 largest U.S.
companies, May, 2003 Financial Executives
International Working Council for CFOs Research
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New Regulations Require Long-Term Strategy
Automated Processes Exception-Based Mgmt
IT Trans- formation
On-Going Monitoring Reporting
Automated Control Solutions
Implementing System-Based Controls
IMPACT ON IT INVESTMENT
Point Tools
Defining, Documenting, Standardizing Processes
Assessment

ONGOING

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COSO Framework- Identifying and Assessing Risk
The COSO Frameworks Three Dimensions Provide
Criteria for Evaluating Internal Controls

• Requires an entity level focus and an activity
  level focus
• Consists of three objectives
• Effectiveness and efficiency of operations
  (including safeguarding of assets)
• Reliability of financial reporting
• Compliance with applicable laws and regulations
• Consists of five components
• Control environment
• Risk assessment
• Control activities
• Information/Communication
• Monitoring

Focus of 404
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Compliance Framework
Financial Element
Accounts Payable 39,916,322
Business Process
Accounts Payable
Sub Business Process
Sub Business Process
Sub Business Process
Process Accounts Payable
Vendor File Maintenance
Vendor Account Reconciliations
Risk
Risk
Invoice Errors
Fraud
Control
Control
Test Plan
Restrict One Time Vendor
3 Way Match
Failure
Diagnostics
Action Plan
Compare current results to benchmark, Changed
Yes/No
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Manage Multiple Compliance Projects

• Coordinate all compliance projects such as
  those associated with Sarbanes-Oxley, internal
  audit, and operational risk
• Each project individually controls all aspects of
  the process
• Separate or shared document repositories for
  risks, controls and tests

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Internal Controls Enforcer
Streamlined Documentation
Continuous Monitoring
Business Unit Accountability
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Compliance Framework with Enterprise Portal

• Role-based security
• Works with Government Portal and CFO Portal

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Streamlined Documentation with Process Workbench

• Automated set-up and import of risk library ,
  structures, and process documentation

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Streamlined Documentation with Process Workbench

• Financial element and business process
  prioritization

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Streamlined Documentation with Process Workbench

• Repository of risks and controls

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Streamlined Documentation with Process Workbench

• Single document repository
• Content management system

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PeopleSoft Internal Controls Enforcer
Streamlined Documentation
Continuous Monitoring
Business Unit Accountability
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Continuous Monitoring with Diagnostic Capabilities

• Self-assessment survey
• Automated audit of system controls and best
  practice business processes

• Automated audit of system controls and best
  practice business processes

• Proactive alerts of system changes

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Continuous Monitoring with Diagnostic Capabilities

• Self-assessment survey
• Automated audit of system controls and best
  practice business processes
• Proactive alerts of system changes

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Continuous Monitoring with Diagnostic Capabilities

• Issue tracking
• Internal and external testing plans
• Standard audit procedures

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Continuous Monitoring with Diagnostic Capabilities

• Issue tracking
• Internal and external testing plans
• Standard audit procedures

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PeopleSoft Internal Controls Enforcer
Streamlined Documentation
Continuous Monitoring
Business Unit Accountability
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Accountability with Executive Dashboard

• Snapshot of risk exposure and control assessment
• Drill-down to business process details

Track key processes

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Accountability with Executive Dashboard

• Snapshot of risk exposure and control assessment
• Drill-down to business process details

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