Close Management Software Series: Closing Management Software’s Impact on Your Audit and SOX Compliance
Dec 04, 2014 | By Michael Whitmire
So far in our Close Management series, we have discussed what CS is and how it can help your accounting team cut days off the close. In addition to streamlining month end, CS has an incredible impact on the annualaudit and SOX compliance.
Annual Audit Support
Who doesn’t love a good PBC request list? …Okay, nobody really. The annual audit request process can be time consuming, especially for departments that aren’t the most organized. First, you have to take time away from your actual job to get documents organized and sent over. Then, whenever a question comes up about some one-off transaction that happened 6 months ago, somebody from the team has to drop everything and try to answer it.
If you are organized, the auditor’s request list should be manageable. But, do you save all your support on a shared drive? Bury your comments in spreadsheets? Sign physical copies of journal entries and store them in filing cabinets? These are a few very common habits that can add hours to the audit. The good news is CS will make your audit (and your life) much easier. CS organizes audit documentation and facilitates communication with the auditors. Less time spent on your audit means reduced audit fees and more time for your staff to focus on closing the books and preparing the 10-K.
If you’re fortunate enough to be a publicly traded Company, part of every audit is the testing of your internal controls. Proper documentation of your policies and procedures plus segregation of duties in preparation and review is essential for minimizing audit risk on the way to a clean opinion. CS will help your accounting department document your processes, internal controls and sign off dates. Auditors will request you to walkthrough your accounting function and with CS it is easy to facilitate these walkthroughs and show historical data to support your internal controls.
SOX compliance and audits can cause major headaches for any accounting department. CS can help your accounting department document internal controls, improve audit documentation and ultimately reduce audit time (and fees!).
In the final part of our Close Management Software series we’ll discuss how technology has evolved and what we think the future entails.
Until then, Happy Closing!