Case study: How we helped strengthened the reliability, integrity, and transparency of a client’s financial reporting

These days, there’s a growing number of organizations looking to adopt better risk management practices — even when there’s no regulatory requirement to do so. One way they’re doing this is to invest in support services for activities involving internal controls over financial reporting. These services can help your organization mitigate risks, detect irregularities, and improve transparency.

The following case study showcases an organization in the financial sector that proactively chose to establish an internal control framework for financial reporting. With personalized support from our Enterprise Risk team, the initiative was transformed into a solution that addressed the client’s unique operational needs.

The client’s challenge

Without any regulatory prompting to do so, our client — a financial services organization — chose to develop a structured framework inspired by the best practices for internal controls over financial reporting. The desired outcome was to strengthen the reliability of their financial reporting, increase the confidence of management and their board of directors, and improve the transparency of processes.

Prior to engaging us, the organization began implementing some controls related to its business processes and information systems. They’d even conducted internal tests without developing a complete approach or documenting its practices. In short, the internal control environment was under construction.

Our approach

To meet the client’s needs, our team developed a structured delivery approach based on collaboration and adaptability. We took the time to understand their internal processes, the specific challenges of each department, and their governance objectives.

Right from the start, we worked with stakeholders identified by the client, taking into account their role and level of involvement in the financial processes. Before even starting the work, we scheduledmeetings with each stakeholder to explain the challenge and our approach, clarify expectations and roles, and to answer their questions. These meetings were essential to keep everyone on the same page and in establishing a trusting environment.

From there, our team conducted an in-depth analysis of existing financial reporting-related business processes and information systems, identifying the most relevant controls based on risk level. This allowed us to eliminate duplicates, reduce less relevant controls, and strengthen undervalued controls.  

Our experienced advisors have honed a methodology for rotating control tests, allowing for higher coverage of the control environment with more efficient working methods.

The results

With support from our Enterprise Risk team, the client was able to structure its internal control practices more effectively, in addition to increasing the reliability of its financial reporting and the transparency of its daily operations.

At the operational level, the proposed approach has optimized resources. By targeting the most relevant controls based on risk level and adopting more efficient methods, we were able to help the client reduce the time spent on this project by 25 – 30 percent.