Improve while you Comply Leverage Financial Reporting Compliance Initiatives to Build new Business...
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Transcript of Improve while you Comply Leverage Financial Reporting Compliance Initiatives to Build new Business...
Improve while you Comply
Leverage Financial Reporting Compliance Initiatives to Build new Business Opportunities
OMB Circular A 123 & 133, Sarbanes-Oxley, SAS 104 to 112 and
International Financial Reporting Audit Standards
Kent Busse, PresidentTransition/1
Transition/1
Integrating People, Process and Technology with Strategy
Transition/1 Software
Transition/1 Software
Leverage With Your Implementation Methodology Integrated
• Market to Companies that have Compliance Requirement.– Shorten Sales Cycle– New Business - no or limited competition if new system is required.– Get paid to identify opportunities.– Build relationships with local CPA firms to build future pipeline
• Improve Implementation Success, Profitability and Customer Satisfaction.
– Improve Consistency.– Get new staff up to speed quickly.– Monitor project status (Stay in scope)– Leave clients with documentation of their system with the way it works.
• Built In Continuous Revenue Streams.– Help clients automate high value processes and controls (Value billing)– Enhance “Trusted Advisor” Status.– Process Improvement– Compliance Assistance
Transition/1 Software
Transition/1 Software
First: The Compliance Opportunity
• Target market– Non-Accelerated filers (public companies < 75M in market cap– Private companies getting audits– Any business doing business with government– Non-Profits– CPA firms with audit practices
• Positioning– Open door as internal control expert– Document compliance efficiently – Improve the business
• Results– New Business opportunities – Long Term Strategy– Enhance existing relationships– Set’s YOU apart from the competition
(if the competition even get in).
Transition/1 Software
Transition/1 Software
It Started with Sarbanes-Oxley - SOx
• All of these standards require Companies to provide auditor with:– Management’s Risk Assessment of financial reporting controls– Documentation of effective control environment
(Risk Control Matrix and Narrative)– Proof key financial reporting controls are designed and
operating effectively. (Testing Results)– Auditor will now issue audit opinion on financial reporting
controls – can cause qualified opinion
• The Value Proposition if Done Right:– Good controls hit the bottom line quickly– You can leverage compliance to help improve the business
operation– Automating controls save valuable resources audit expense– Achieve quick wins and quick payback
Trickle Down ImpactCompany Type
Compliance Standards all Point To:
COSO
Public Companies SOx – Sarbanes-Oxley
Private companies getting audits
Statement of Auditing Standards (SAS 104 to 112)
Non-Profits Statement of Auditing Standards (SAS 104 to 112), OMB Circular A123 & 133
Companies Receiving Governmental Funds
Statement of Auditing Standards (SAS 104 to 112), OMB Circular A123 & 133
Governmental Agencies (Federal, State and Local).
OMB Circular A123 &133A
Who’s next is the question?
Transition/1 Software
Transition/1 Software
All Financial Reporting Standards are using the COSO Framework
Transition/1 Software
Transition/1 Software
5 Easy Steps to Compliance\ and Beyond!!
Transition/1 Software
Transition/1 Software
Step 1: Lay Out Your Control Environment Framework
Identify the framework and methodology to use.– COSO – Committee of Sponsoring
Organizations of the Treadway Commission Recommended by the AICPA
– ERM – Enterprise Risk Management
– CobiT Control objectives for information and
related Technology Capture the Entity Level Risk
Process Grouping– Business Cycles / Functional Areas
Cycle/Functional Objectives
Transition/1 Software
Transition/1 Software
Step 2: Identify Key Processes
Identify Key Processes– Define Purpose, Scope, Policies– Identify People (Process Owner) Authors, Reviewers and
Approvers– Identify Goals and Objectives
• Control and Performance Objectives • Risks• Control Activities
– Map the activities and tasks– Identify Systems that generate financial transactions.– Identify Performance/Compliance Indicators
Transition/1 Software
Transition/1 Software
Step 3: Establish Control Objectives
• What are the desired outcomes?• Types
– Financial Reporting– Operational– Governmental Compliance– Confidentiality– Strategic
• Perspectives– Financial– Customer– Employee/Learning– Innovation– Compliance
• Align with High Level Goals and Objectives
Common Assertions
TimelinessCompletenessAccuracyAuthorizationConsistencyReliabilityFinancialPredictability
QualityEtc.
Transition/1 Software
Transition/1 Software
Step 4: Risks/Process Assessment
Risk – What can go wrong?– Inherent Risk – Before applying
Control Activities– Residual Risk – After applying
Control Activities
Assessment– Probability– Significance– Impact
Remediation– Reduce Probability and
Significance– Cost vs.Value
Risk Impact
Financial Reporting• $$$
Operational effectiveness or efficiencies
• $$$• Quality• Safety
Governmental Compliance
Strategy
Assess the value of avoiding or detecting the Risk
Transition/1 Software
Transition/1 Software
Step 5: Identify, Test, Evaluate and Report on Key Control Activities
• Types– Preventative
– Detective
– Corrective/Reactive
• Technology vs. Manual
• Satisfy Control Assertions
• Evaluate through testing
– Designed Effectiveness
– Operational Effectiveness
– Criticality
• Identify Remediation and Improvement Activities
Transition/1 Software
Transition/1 Software
Automated Sign-offs: Risks, Controls and Testing
Transition/1 Software
Transition/1 Software
Tools to Review Control Effectiveness and Impact
• Risk Control Matrix
– Do we have adequate controls?
• Preventative• Detective• Reactive
– Are the controls:• Designed
Effectively?• Operating
Effectively?• Are they Key
or Critical Controls?
– Have we covered adequate assertions?
Transition/1 Software
Transition/1 Software
ePM Web Web Version – Add-on
Transition/1 Software
Transition/1 Software
Leading Material Weaknesses Companies - Revenue < $100 Mil.
• Information technology
• Competency and training of accounting personnel
• Design of controls/lack of compensating controls
• Revenue recognition
• Financial close process
• Inadequate account reconciliation
• Consolidation, mergers and inter-company accounts
• Control environment
• Treasury and Equity
Published in the Journal of Accountancy – August 2007 Study by Lord& Benoit, a firm specializing in Sox compliance
Transition/1 Software
Transition/1 Software
• Complete Process Documentation– Documentation align to “How the Process Works”– Flow chart for walk-throughs– Identify Key Controls
• Implementation and Scope Built In– Reduce Project Risk– Stay on track
• Budget Built In• Client Commitments Built In• Priorities• Real-Time Status for Weekly Meetings
Improve Implementation Success
Transition/1 Software
Transition/1 Software
Status At Your Fingertips
Transition/1 Software
Transition/1 Software
Use Wizards to create Consistent Documentation
Transition/1 Software
Transition/1 Software
Manage Methodology Plan
Methodology Implementations
Software Implementations Change Management
Business Assessments Improvement Initiatives
Audits Sarbanes-Oxley
ISO COSO
Transition/1 Software
Transition/1 Software
Improving Operational Performance
• Moving to the “Trusted Advisor Status”– Helping Clients Improve the Business– Reduce Issues
• Continuous Revenue Model– Monthly or Biweekly Improvement Meetings– Why would the client stop if you are adding to the bottom line?
• Value Billing– If you can solve a monthly 25K Issue and it took 4 hours would
you bill $800 or $10,000?
Transition/1 Software
Transition/1 Software
What Does Financial Reporting Compliance and Business Improvement have in Common?
0%20%40%60%80%
100%
F inance IT
Operations
S ales
Human Resources
MarketingOther
C lient S urvey
% C ompaniesImpacted
In an effective control environment over 80% of the financial reporting controls are implemented within the operations.
Departments impacted by SOx work
Transition/1 Software
Transition/1 Software
…and Beyond! Process Improvement
Transition/1 Software
Transition/1 Software
Helping Owners, Shareholders and
Managers Gain control of
the operation
ePM33 Building Blocks
Continuous ImprovementContinuous ImprovementMonitoring and ReactingMonitoring and Reacting
Performance ManagementPerformance Management(Align People & Processes, using Technology,(Align People & Processes, using Technology,
to the Corporate Strategy)to the Corporate Strategy)
Key ProcessesKey Processes(Control Objectives, Risks (Control Objectives, Risks
and Activities)and Activities)
Strategic Strategic Goals & ObjectivesGoals & Objectives
Identify Entity RisksIdentify Entity Risks
VisionVisionMissionMissionCultureCulture
The Business Management Framework
Transition/1 Software
Transition/1 Software
Beyond: Identify Key Performance Indicators
What to Measure– Input
– Throughput
– Output
Alignment– Process– People (Accountability) – Perspective (Customer, Financial,
Innovation, Employee or Compliance)– Objective (Assure the process is
meeting the objectives)
All KPIs need to be measured within the same period
Scorecard– Process Scorecard
– Strategy/Objective Scorecard
– Perspective Scorecard
– People-Management/Position Scorecard
Periodic Review– Weekly
– Monthly
– Quarterly
Transition/1 Software
Transition/1 Software
Compliance Performance
Scorecards
KPI’sKey Performance Indicators
Transition/1 Software
Transition/1 Software
Automate Controls and Workflow
Data captured at a step can be passed to the sub-step
Update Add, Modify or Delete
Transition/1 Software
Transition/1 Software
Data Sources& Processes
Act/AdjustAct/Adjust
Transaction Systems Daily Activities
OTHEROTHER
Manage &Monitor
DataMiningPerformance &Compliance Indicators
Automated Email AlertsCompliance &Performance IssuesAction Items
ScorecardsLeading Indicators,Trending
COSO Elements ReviewStrategy, Operational effectiveness,Financial reporting reliability & Gov regulations
• Non-compliance alerts
• Efficiency Alerts• Automated workflow• KPI measurements & scorecards
• Action ManagementCompliance and Improvement
FrameworkAssess RiskInternal ControlsFinancial Reporting ImpactOperational EfficienciesGovernmental CompliancesStrategy
Increased Visibility, Alignment & Performance Improvement
CO
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Identify, Define& Align
Documentation & AlignmentBusiness Units/Business Cycles/Functional AreasKey ProcessesPosition/RolesObjectives//Risk/Performance
BusinessTransparency
Visibility
LEGACYLEGACY
ePM Compliance & Performance FrameworkAutomate Controls to Improve the Business
Feedback LoopFeedback LoopManagement Management (Owners)(Owners)
eProcessManager® Framework
ERP & CRMERP & CRM
SCM, HRSCM, HR
eProcessMonitor®
Transition/1 Software
Templates Make the Process Easy!!
Transition/1 Software
Transition/1 Software
Compliance - Open the Door to CPA Relationships
• CPA’s that do audits will cherish this relationships.– Auditor cannot document controls and then audit them.– Auditor cannot provide consulting services to audit clients.– Are they going to want another CPA firm in their client?– How many of these small to medium size business can do
this on their own?– Using word and Excel will never get an return on their
investment
• Where will they look if a client has a poor financial reporting systems and controls.– Relationships worked and marketed right will provide you future
new revenue opportunity for SAGE Products.
Transition/1 Software
Transition/1 Software
Leverage With Your Implementation Methodology Integrated
• Improve Implementation Success.– Improve Consistency.– Get new staff up to speed quickly.– Monitor project status– Leave clients with documentation of their system with the way it works.
• Built In Continuous Revenue Streams.– Help clients automate high value processes and controls (Value billing)– Enhance Trusted Advisor Status.
• Market to Companies that have Compliance Requirement.– Shorten Sales Cycle– No or limited competition if new system is required.– Get paid to identify opportunities.
Transition/1 Software
Transition/1 Software
Helping You Make It Happen
• Premier Authorized Partners– Cendowski Advisors
• Is the leading CPA Firm in fraud deterrence and internal control implementations.
– MIS Group USA • Sage Leading VAR
– RBSM CPA Firm• SEC Registered audit Firm for publicly traded companies.
• SAGE SIP – Successful Implementation Program
Transition/1 Software
Transition/1 Software
Offer Solutions from $5,000
Description Estimated Pricing
Documentation Starter Solution
Includes Software, Template and Maintenance From 5,000.00
Services Implementation From 5,000.00
Ongoing Services Open
Enterprise Solution
Includes Software, Template and Maintenance From 18,000.00
Services Implementation From 10,000.00
Ongoing Services Open
Ask about: Our Zero Net Cost Partner Program
CPA Referral Partner Program
Transition/1 Software
Transition/1 Software
Reseller Promotions:
Description Pricing Webinar Special
Gold Program - - 10 Internal NFR Licenses - 40% & 30% MarginseProcessMonitor
$5,995.00
$2,000.00
$1,495.00Through next
Friday$1,200.00
Investment Retail Credit (Must sell within 90 days) maintenance required
List Price Credit = to Investment
Free
Class (3 day) Irvine, CA – 18 spotsSep 15 – 17 – 2 Days Training & 1 Day Implementation (2nd Person $795)
2,195.00 995.00
Sage Templates 1,495 to 2,495 500
COSO Business Template – All cycles and built in risk assessment questionnaire
2,495 500
We are an endorsed partner so you can use your SAGE Marketing Coop Dollars for marketing.
Invest Today$4,590
Get paid back on first sales
Transition/1 Software
Transition/1 Software
Questions?
• Updated Power Point visited:• www.t1mas.com/sage
This will be posted by Monday.
User: SAGEVAR
Password: sage2008
Phone 866 590-4ePM
Sharon, Aggie, or Kent