Control Automation, Monitoring and Enforcement: Everything you need to knowApril 04, 2023
Random sampling and monitoring of controls just cover a small fraction of configurations, segregation of duties/access rights, master data, and transaction controls in the company’s environment. Manual processes for control monitoring focusing on random sampling leaves the company with a false sense of control yet, in reality, there may be significant control issues exposing the company to malicious and inadvertent issues and events.
A random sampling of controls results in:
• Consumption of time: Tremendous amounts of internal control and audit time are required for random sampling which only covers a minimum percentage of controls.
• The inevitability of failure: It is very easy to commit errors, miss out the critical things, and even fail to uncover the wrong-doing and issues.
• Glossing over issues: When anything is found, it is easier for auditors and internal control functions to gloss over it as they don’t have the cycles to unpack it and figure out what happened. Issues require time to investigate and require more sampling.
• Getting to the bottom line: It takes more time to perceive the financial impact and exposure to control failure, problem, or actual wrongdoing in the organization.
• Longer audit cycles: Manual processes only doing random sampling means the company has longer audit cycles and the employees are overworked. This either slows down the business or results in superficial audits, and control evaluations as both internal control and audit teams ought to keep up yet don’t have the time.
It is time to consider complete control automation across configuration, mastering data, transactions, and access in their systems. This allows for:
• 100% control monitoring: Doing complete transaction control testing and review.
• Focus on exceptions: Avoiding all false positives by focusing on exceptions with real business exposure.
• Financial impact analysis: To automate the overall financial impact and analytics by prioritizing and acting on significant control issues.
• Ensure compliance: Ensure nothing is slipping through the cracks which an external auditor or regulator shall find. This results in fewer or no audit findings and avoidance of penalties and fines.
• Resource focus on what matters: To free up resources by doing manual and random sampling of controls allowing t people to address real control issues that are discovered automatically.
• Streamlined reporting: Viewing reports and control issues in real-time thereby not spending weeks consolidating manual testing reports.
Today, dynamic business requires 360° awareness and perception of controls. Manual processes that focus on random sampling belong to the past and leave the company with exposure and a false sense of control.