“The purpose and effectiveness of internal control are being tested “like never before” by myriad external pressures . . . continued effects of the pandemic, the turbulent economic climate, regulation, as well as data and technology are all presenting organisations with unique challenges for their internal control activities.”
A recent ACCA report made these worrying claims. But they reflect braod experience around the world.
Ensuring effective and efficient Internal Control over Financial Reporting (ICFR) is a challenge at the best of times.
Our business risks are exposed through the interactions between our processes, people, third parties, applications and technologies. ICFR is a relevant topic for all organizations, public and private, concerned with corporate governance and financial risk management.
Today, we have accelerating business challenges with price inflation, supply chains, regulation, interest rates, hybrid working models, ESG, third party risk, M&A, consumer behaviour, cyber risk, fraud and geopolitical instability.
These are turbulent times. We are driving fast in, at best, variable conditions, and in many cases with very little visibility.
69% of major corporations have had one or more significant audit deficiencies in the last 3 years, and that is understandably on the increase. Despite huge investments in digitization, the financial control problem isn’t going away.
We have dug much deeper and will share the trends on ICFR, the key challenges affect audit, finance and IT, the impact of technology, key questions to ask and some strategies, and even a “PlaybooK” for an agile response to better navigate these choppy waters.
- Prior to 2020, digital transformation was already accelerating.
- 2020 & 2021 accelerated business change, for all the reasons we know only too well . . .
- In 2022 and beyond, turmoil & uncertainty are still very much with us, maybe even more so!
Throughout all this, did we pay enough attention to changing risk profile as we changed processes, working practices and technology stacks?
We have always had an approach to manage risk, formerly The 3 Lines of Defence, now the “3 Lines of Assurance” from the IIA.
We asked a large audience of finance, audit, risk & controls professionals what their biggest concern or ICFR were.
You can access the full recording here . .
If this topic resonates, you can get the “ICFR Playbook” here . . .