Takeaways from 38th World Continuous Auditing and Reporting Symposium

I attended the Rutgers Business School 38th World Continuous Auditing and Reporting Symposium on November 4th & 5th 2016 on the Rutgers campus in Newark, NJ. This was the 4th of these symposiums I’ve attended and all were very worthwhile. The symposium was once again sold out and there were attendees watching the webcast from all around the world. These are my takeways from the two days. I invite comments from other attendees or the presenters to correct any errors and add information you feel is important that I left out.

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Do You Have Active Software Escrow Agreements in Place for All Mission Critical Software?

Now is a good time to specify your active escrow requirements. Make these requirements a non-negotiable condition of all new software licenses or cloud software subscription. Inventory all existing business critical software licenses/subscriptions and ensure that active escrow is a part of these agreements. Over time, bring these existing agreements into compliance with your new escrow requirements.

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Why Does the Adoption of Technologies for Compliance Activities Lag?

The adoption of technology by finance functions has been slow but has accelerated in the recent past. Enterprise performance management (EPM) tools like hostanalytics, financial controls automation like Blackline, and general ledger/ERP solutions like Net Suite are gaining acceptance. So why is it that approximately 80% of public companies continue to use Microsoft Office (Word & Excel) for their financial compliance (e.g., COSO, SOX, MAR) programs?

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Can Internal Controls Help Avoid Corporate Scandals?

A comprehensive objective-setting process with monitoring will significantly reduce the risk of a corporate scandal. Including all aspects of objectives and related risks within the internal control framework at your organization is an excellent way to leveraging compliance to protect your organization from scandal.

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Mitigating Risks Arising from the Boomer “Brain Drain”

The demographics are alarming. Hopefully alarming enough that leaders come our way to help mitigate the risk that significant portions of the collective organizational intelligence walks out the door in the next decade. We need to seize this opportunity to fix what we have always known to be a gaping hole in internal controls; the lack of truly integrated, practiced and demonstrated P&P.

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Delivering on Peter Drucker’s Call-to-Action

The key point is that technology can actuate procedures so they are not just pages in a binder, technology can directly relate the control execution and review procedures with all the evidence of performance and review, and technology enables moving the responsibilities to lower-level workers to deliver on the “knowledge worker” productivity Peter Drucker emphasized as critical to sustained success. Economist Robert Gordon argues in his new book, The Rise and Fall of American Growth, that America’s future economy will not be nearly as bright as its past mainly because the great improvements in productivity and living standards (e.g., electrical power, transportation, indoor plumbing) achieved in the 20th century have no such counterpart to improve productivity in the 21st century. Peter Drucker’s challenge to unleash the productivity of the “knowledge worker” presents an opportunity to achieve such productivity and lifestyle improvement gains. Executing financial, compliance, operational and strategic objectives in a consistent manner, with accountability, documentation and accessibility is one such “knowledge worker” productivity opportunity. The best productivity comes from good technology that support consistency, clear communication, and ease of tracking thereby supporting moving the work to lower skilled workers thereby increasing productivity per dollar spent. Let’s use technology to leverage compliance and deliver on Peter Drucker’s call-to-action.

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Insights to Revised COSO Integrated Framework – (Revised COSO Series)

The revised Internal Control – Integrated Framework was issued by COSO in May of 2013 to update and, effective 12/1/14 (i.e., now), replace the original Framework published in 1992. At this point most of you are deep into the year one process of adjusting to the new Framework and can see the light at the end of the tunnel. Now is a good time to reflect on how to use this experience that for many has been a “fire drill” to actually help your organization improve in the future.

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Using On-hand Inventory for Predictive Analytics (Predictive Analytics for Loss Prevention Series)

The transaction activity and on-hand inventory that is available from retail perpetual inventory systems provides a wealth of information. While some retailers apply robust analysis tools, techniques and procedures to this data, many small to medium-sized entities (SMEs) do not. The flow of products through your store or your distribution center (DC) is the lifeblood of your business. A well-run business leverages this information to identify issues and drive success.

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“Show Me”

Have you gathered bits of information from certain supervisors that always stuck with you and helped you in your career? One of these that has always stuck with me is Mike Bronstein, my supervisor at Loews, saying, “I’m from Missouri, Show Me!” This had nothing to do with the “Show Me state” but a lot to do with gathering sufficient evidence to support your audit conclusions. I left Loews in 1999 but this is one of many lessons I’ve carried forth with me. Certainly there are many who have worked for me since who are familiar with that phrase.

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