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Posts

  • Christine Doxey
    Addressing the Layers of Chaos: 10 Best Practices to Simply...5.0
    Topic posted December 5, 2019 by Christine DoxeyRed Ribbon: 250+ Points, tagged Error, Financial Reporting Compliance, Financial Transactions, Financials, Fraud, Governance, Risk Management, Tip in Human Capital Management > Risk Management public
    Title:
    Addressing the Layers of Chaos: 10 Best Practices to Simply Your Financial Close
    Summary:
    As many companies get ready for a December Fiscal Year-End Close, they should consider the best practices recommended in this article.
    Content:

    Introduction

    Over the last decade, the financial reporting landscape has seen significant change. Finance and accounting executives face mounting pressure to increase the accuracy of financial reporting while decreasing the turnaround time needed to close the books. Regulatory agencies have introduced a host of new standards and accounting rules changing materiality  thresholds, requiring detailed schedules, and new disclosures for public filings. To complicate matters, many organizations are being asked to do more with less as headcount numbers are reduced in response to economic pressures. This complexity adds layers of chaos impact the end-to-end process and adversely impacts the time it takes to deliver the final financial statements.  

    There are two overlapping strategies that can help to remove the complexity of your closing process and are applicable to all types of companies and industries.

    1. Implement Best Practices: Consider using recommended best practices to remove the complexity from the closing processes. Implementing best practices can address current process challenges and facilitate a good foundation for financial close automation.
    2. Financial Close Automation:  Automated solutions can significantly simply your financial close process. As an example, you can automate your closing checklist and assign tasks and approvals through workflow which drives a streamlined reporting process.

    10 Best Practices to Simplify Your Financial Close

    The following 10 best practices can help simplify your financial close, provide timely and accurate results, and reduce the cost of the process. Each best practice is grouped by the strategies noted above.  

    10 Best Practices to Simply Your Financial Close

    Supporting Strategy

    1. Document  Your Closing Process and Cross-Train Your Accounting Staff

    Involve the whole organization in understanding the goals and schedule for the close by using well-communicated checklists and project plans. Ensure that roles and responsibilities are documented and well-communicated to all the stakeholders involved in the closing process. Use the documentation to cross-train staff members.

    Implement Best Practices

    1. Develop Partnerships across Departments to Resolve Recurring Cross-Functional Issues and Obstacles to Close

    Following each close, an “Obstacles to Close” or “Post Mortem” report is distributed across the organization. This process provides visibility of cross-functional issues and identifies areas for process improvement.  By constantly looking at ways to improve the financial close, the process can become less cumbersome and easier to manage. 

    Implement Best Practices

    1. Review Unused Accounts in the General Ledger and Minimize Accounting Data

    Minimize accounting data in the core general ledger by limiting code segments to sub-ledgers. This is a somewhat overlooked opportunity to improve the close process, since keeping the general ledger relatively simple accelerates data roll-ups, as well as pushes problem resolution to the business functions that are closest to specific transactions.

    Implement Best Practices

    1. Complete Standard Allocations, Adjusting Entries, Accruals and Estimates in Advance of Close

    Use a standard allocation system with a defined tolerance or true up when something is out of the established tolerance. Create the adjusting entries to recognize prepaid expenses, accrue outstanding invoices, relieve accruals that have been paid, and recognize depreciation and other amortizations.

    Financial Close Automation

    1. Minimize  and Automate Journal Entries During the Closing Process

    Reduce a manual journal entry process. If some journal entries need to be created manually use an upload process with built in checks and balances.  Consider the use of recurring entries and estimates  that can streamline the closing process.

    Financial Close Automation

    1. The Reporting Process: Use Trial Balance Reports as the Foundation for the Close and the Preparation of Accurate Financial Statements

    Use a system generated adjusted trial balance report to review the final balances in the ledger. Verify that the balances are accurate, checking the account activity if needed. Use standard templates for recurring reports. Report writers can streamline and make reports consistent and substantially reduce data entry and the need for reconciliations. 

    Financial Close Automation

    1. Establish a Closing Date as a Critical System Control

    Establish a closing date by which all transactions must be posted. Communicate the closing date to everyone who has access to modify the ledger. A closing date can be implemented as a critical system control and supports the management of your fiscal period close process and the integrity of closed fiscal periods.

    Implement Best Practices  and Financial Close Automation

    1. Manage the Financial Close like a Project

    Implement a schedule for posting closing entries with duties assigned to specific individuals. Ensure that everyone knows the deadlines and what is needed to meet the deadline.

    Implement Best Practices  and Financial Close Automation

    1. Move to a Monthly Soft Close Process

    Transition from a monthly hard close to soft monthly closes and quarterly hard closes. This change allows companies to reduce investigation levels and rely on accruals and estimates during soft closes.  A soft close is best facilitated with automated reconciliation processes and reporting.

    Implement Best Practices  and Financial Close Automation

    1. Develop and Monitor Performance Metrics

    Gathering metrics and publishing the results can help to detect and prevent fraud, identify process improvements and support automation opportunities.  

    Implement Best Practices  and Financial Close Automation

    Conclusion

    The financial close process is one of the most fundamental indicators of the efficiency of your fiscal infrastructure, and is the critical foundation that must be in place before your finance and accounting team can even begin to optimize its role as a true consultative business partner and trusted advisor, assisting in achieving strategic goals and creating shareholder value. Addressing the layers of chaos with our recommended best practices is a key step in the journey to becoming a trusted business partner. Automating the close provides the tools to drive results and support the value of the finance and accounting function.

    If you'd like to improve your financial close, please contact me at chris@chrisdoxey.com.

     

  • Venkatesh Chella
    After 18C Upgrade, Several of the Advanced Access Control...2
    Topic posted January 25, 2019 by Venkatesh ChellaRed Ribbon: 250+ Points, tagged Advanced Controls, Governance, GRC, Risk Management, Tip in Human Capital Management > Risk Management public
    Title:
    After 18C Upgrade, Several of the Advanced Access Control features are not working.
    Summary:
    Several Advanced Access Control Features stopped working after 18C Upgrade
    Content:

    FYI for Risk Management Cloud - Advanced Access Control - 18C users.

    We are getting the error 'java.lang.NullPointerException' when you try to open any Control that have already been deployed. This started happening only after 18C upgrade. This does not happen to controls that are deployed new.

    Also we are not able to deploy already existing Models into Controls after 18C. But we are able to deploy both new Models and Controls.

    New Models and New Controls = OK to Deploy, Execute and View results.
    Old Models and Deploy them now as Controls = Not working
    View Old Controls = Not able to view and getting errors " Java.lang.NullPointerException "
    Execute Old Controls - The Job fails after starting. Getting error " oracle.apps.odin.domain.job.JobExecutionException: Error occurred during analysis "

    Error Codes
    ---------------------------------------------------
    java.lang.NullPointerException, oracle.apps.odin.domain.job.JobExecutionException: Error occuring during analysis

    Version:
    Oracle Cloud application 13.18.10 (11.13.18.10.0)
  • Lana Prout
    Call for Nominations – Oracle Change Agents of Finance A...5.0
    Announcement posted December 19, 2018 by Lana ProutGreen Ribbon: 100+ Points, tagged Announcements, Financials, Procurement, Project Portfolio Management, Risk Management in ERP Members > ERP Announcements public
    Title:
    Call for Nominations – Oracle Change Agents of Finance Awards
    Announcement:

    There are only a few days left to submit nominations for the Change Agents of Finance Awards! Don’t miss this opportunity to have your team, colleague, or yourself, recognized for achieving goals by leveraging the cloud and other emerging technologies.

    Nominations close this Friday, December 21st. Award winners will receive a complimentary pass to Modern Business Experience in Las Vegas, March 17-19, 2019.

    Nominate now >>

     

  • Barry Greenhut
    Checklists for Financial Reporting Compliance5.0
    Topic posted September 1, 2016 by Barry GreenhutSilver Medal: 2,000+ Points, tagged Compliance, Financial Reporting Compliance, Financials, Governance, GRC, Risk Management, Sarbanes Oxley, SOX in Human Capital Management > Risk Management public
    Title:
    Checklists for Financial Reporting Compliance
    Summary:
    For beginners and advanced planners
    Content:

    Our Get Started with Risk Cloud page offers two checklists that provide foundations for planning and go-live:

    Here's a third checklist that more advanced planners can leverage - the prerequisite is past experience with financial reporting compliance processes:

  • Christine Doxey
    Compensating Controls to Mitigate Risk5.0
    Topic posted February 20, 2019 by Christine DoxeyRed Ribbon: 250+ Points, tagged Advanced Controls, Compliance, Financial Transactions, Fraud, GRC, Risk Management, Sarbanes Oxley, Separation of Duties, SOX in Human Capital Management > Risk Management public
    Title:
    Compensating Controls to Mitigate Risk
    Summary:
    Learn about compensating controls as an additional risk management tool.
    Content:

    Introduction

    Segregation of duties promotes the use of sound business practices and supports the achievement of a business process objective.  When designing segregation of duties controls for a business or financial process, most business process owners start with identifying incompatible functions and then define the segregation of duties and systems access controls. However, the segregation of duties control cannot always be achieved in certain situations due to staffing limitations.

    In some cases, an employee will perform all activities within a process. In this scenario, segregation of duties does not exist and risk cannot be identified nor mitigated in a timely manner. As a result, the implementation of additional compensating controls should be considered.

    Definition of Compensating Controls

    A compensating control reduces the vulnerabilities in ineffectively segregated functions.  A compensating control can reduce the risk of errors, omissions, irregularities and deficiencies,  which can improve the overall business process.

    Compensating Controls, CSA and CCM

    However, it should be noted that many companies include compensating controls in their internal controls programs as additional measures to reduce risk. These controls can be embedded in continuous controls monitoring (CCM) and controls self-assessment (CSA) processes.

    Continuous controls monitoring (CCM) refers to the use of automated tools and various technologies to ensure the continuous monitoring of financial transactions and other types of transactional applications to reduce and mitigate risk. A CCM process includes the validation of authorizations, systems access, system configurations and business process settings.

    Examples of Compensating Controls

    1. Skim through detailed transactions report: A manager should consider performing a high level review of detailed report of transactions completed by an employee that performs incompatible duties.  As an example, a manager may simply skim through the report sections that contain high risk transactions or account and may review specific payment types or amounts before the payment is made.
    1. Review sample of transactions:  Using a CSA or CCM process, a manager may select a few sample of transactions, request for the supporting documents and review the documents to ensure that they are complete, appropriate, and accurately processed. In addition to detecting errors, the knowledge of a periodic review could create a disincentive (that is, reduce the opportunity) for the person performing the incompatible duties to process unauthorized or fraudulent transactions. This review identifies transactional anomalies which can be used as a flag to indicate collusion.  As an example, unchanged pricing and using the same suppliers for several years can indicate possible collusion between a buyers and suppliers.
    1. Review system reports: Applications that support business or office operations have embedded reporting capabilities that enable the generation of reports based on pre-determined or user defined criteria. A review of relevant system exception reports can provide good compensating controls for an environment that lacks adequate segregation of duties. As an example, I suggest a review of report of deleted or duplicated transactions, report of changes to data sets and report of transactions exceeding a specific dollar amount on a quarterly basis.
    1. Perform analytical reviews: Another example of compensating control is the comparison of different records with predictable relationships and the analysis of identified unusual trends. For example, a budget vs. actual expenditure comparison or current year vs. prior year subscription fees analysis or comparison of selected asset records to actual physical count of asset might indicate unusual variances or discrepancies that may need to be investigated.  In this review, an analytical review should occur on a monthly basis.  
    1. Reassign reconciliation: If there is an opportunity to reassign one activity from the person performing incompatible function to another employee, a manager may consider re-assigning the reconciliation activity. As an example, reassigning the bank account reconciliation function to someone other than the person receiving cash and depositing it to the bank could improve the quality of internal controls in the cash receipt process. Reconciliations should occur monthly as a standard of internal control.
    1. Increase supervisory oversight: Other forms of activities a manager may perform as compensating control are observation and inquiry. Where appropriate, increasing supervisory reviews through the observation of processes performed in certain functions and making inquiries of employees are good administrative controls that may help to identify and address areas of concerns before a transaction is finalized.
    1. Rotate jobs: Many companies rotate jobs in the finance and accounting department every 1-2 years. This creates an environment of control and can prevent collusion. As example, accounts payable processors should be rotated on a regular basis so that they don’t become too involved with specific suppliers. And as noted above a buyer’s responsibility should be rotated within the purchasing organization.

    Conclusion

    Effective compensating controls can reduce the risk for a process that has limited or inadequate segregation of duties and ultimately can provide reasonable assurance to management that the anticipated objective(s) of a process or a department will be achieved.  As a detective risk management technique, compensating controls tend to look at the accuracy of a transaction after it has occurred but can be used as preventive controls within CSA and CCM processes.

  • Anthony Olivo
    Descriptive Flexfields15.0
    Topic posted February 12, 2019 by Anthony OlivoGreen Ribbon: 100+ Points, tagged Risk Management in Human Capital Management > Risk Management public
    Title:
    Descriptive Flexfields
    Summary:
    Can you migrate DFF from one environment to another. Test to Prod.
    Version:
    Revision 13.18.10 (11.13.18.10.0)
  • Barry Greenhut
    Design and export your own Risk Management reports24.8
    Topic posted March 6, 2019 by Barry GreenhutSilver Medal: 2,000+ Points, tagged Advanced Controls, Compliance, ERP, Financial Reporting Compliance, Financial Transactions, Financials, Fraud, Governance, GRC, Public Sector, Risk Management, Sarbanes Oxley, Security, Separation of Duties, SOX in Human Capital Management > Risk Management public
    Title:
    Design and export your own Risk Management reports
    Content:

    When you subscribe to Risk Management, you get complimentary access to tools that let you design reports, pivot, analyze and export data, and much more.

    We're thrilled to share two new videos by Stephanie Golly, our product manager in charge of this topic. She'll show you how to create and export your own analyses of user access and transactions - an Access Incident Details Extract report (AIDE) and Transaction Incident Details Extract report (TIDE).

    And don't miss Lakshmi Rajamohan's master class in Financial Reporting Compliance reports and dashboards - part of our Hands-On series!

  • Aman Desouza
    ERP – Introduction to Risk Cloud for ERP/FIN Subscribers: O...25.0
    Topic posted September 27, 2017 by Aman DesouzaBlue Ribbon: 750+ Points, tagged ERP, Financials, GRC, Risk Management, Sarbanes Oxley, SOX in Human Capital Management > Risk Management public
    Title:
    ERP – Introduction to Risk Cloud for ERP/FIN Subscribers: October 10, 2017, 9 a.m. PT - Submit Questions
    Content:

    Submit your questions for the ERP – Introduction to Risk Cloud for ERP/FIN Subscribers session to have them answered during the live event. Post your questions by posting a new comment to this topic.

    Please submit your questions by Monday, October 9, 2017.

  • Aman Desouza
    ERP – Introduction to Risk Cloud for Subscribers: S...5.0
    Topic posted September 12, 2017 by Aman DesouzaBlue Ribbon: 750+ Points, tagged Advanced Controls, Compliance, ERP, Financial Reporting Compliance, Financial Transactions, Financials, Fraud, Governance, GRC, Public Sector, Risk Management, Sarbanes Oxley, Security, Separation of Duties, SOX, Tip, Waste in Human Capital Management > Risk Management public
    Title:
    ERP – Introduction to Risk Cloud for Subscribers: September 27, 2017, 9 a.m. PT - Submit Questions
    Content:

    Submit your questions for the ERP – Introduction to Risk Cloud for Subscribers session to have them answered during the live event. Post your questions by posting a new comment to this topic.

    Please submit your questions by Tuesday, September 26, 2017.

  • Maria Centeno
    ERP – Reimagining Finance at Oracle: Accounting Hub15.0
    Announcement posted November 18, 2019 by Maria CentenoSilver Medal: 2,000+ Points, tagged Announcements, Financials, Procurement, Project Portfolio Management, Public Sector, Risk Management in ERP Members > ERP Announcements public
    Title:
    ERP – Reimagining Finance at Oracle: Accounting Hub
    Announcement:
     
    oracle-logo.png Cloud Customer Connect
    ERP – Reimagining Finance at Oracle: Accounting Hub
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    Oracle@Oracle:  Oracle’s rapid transformation from a product company into a leading cloud services provider was powered by the complete suite of Oracle Cloud services. Oracle Cloud has helped us realize unprecedented cost savings, accelerated growth, and increased customer and employee satisfaction.

    Oracle VP of Finance Systems Alex SanJuan shares how Accounting Hub Cloud enables his finance organization to streamline and automate the accounting and reporting process, empower and delight users with faster and more accurate information.

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