How to assure successful audits in finance entities

Finance entities must respond many times during the year to the revisions that the regulations of each region put them through. This is essential in order to maintain transparency and quality of processes in these entities; due to the role that they have in the population life, it is necessary that clear laws are put in place to limit and direct the possibilities of these organizations, and guarantee to the users a right management of their money and assets. How can finance entities guarantee successful audits? This means, how can they receive the approval from the auditors.

First of all, it is important to remind some basic aspects of auditing. A financial audit is the revision of balances and reports in a given organization, made by an independent auditor. The result of an audit is a report made by the auditor, in which they point out if there are problems in processes in the entity. These reports, in addition, present some kind of gradation of possible failures: there can be serious, medium or low problems, and, depending on this, the actions are determined.

If there are only low failures, the organization receives a notification in which they are asked to solve the problems. If medium problems arise, there can be a similar notification, but with a more urgent tone. And, if the problems are severe, the entity can be penalized through fines or the suspension of the permissions for keep on performing the operation and delivering services to customers. Depending on the seriousness, there could even be penalties for individuals, as jail measures or high fines for managers or accountants. For this reason,

The purpose of a financial statement audit is to add credibility to the reported financial position and performance of a business. The Securities and Exchange Commission requires that all entities that are publicly held must file annual reports with it that are audited. Similarly, lenders typically require an audit of the financial statements of any entity to which they lend funds. Suppliers may also require audited financial statements before they will be willing to extend trade credit (though usually only when the amount of requested credit is substantial) (accountingtools.com).

From this, we need to understand that for guaranteeing successful audits, it is necessary to have a solid support in innovative forms of information technology. The main reason is that the amount of data and information that companies manage today no longer allow a complete management of the whole financial picture through manual tools or past technologies. This is even more important for companies whose function is precisely to manage finances, as banks, lending companies, etc. 

Successful audits guaranteed through the use of BPM

Regarding the pressure of the presence of technology in corporate processes, it is necessary to clarify this:

Another myth is that while technology and innovation are transforming nearly every facet of the organization, finance and accounting fundamentals and reporting requirements haven’t changed much in recent years. That view is inaccurate too.

It is important that managers and directives quickly understand that digital transformation impacts the totality of the operation, which means that

Financial management is undergoing the same radical transformation as many other corporate functions and maybe even more so. The tools, processes, and expectations have shifted with the emergence of fintech, block-chain, Big Data, and a slew of other innovations (internalaudit360.com).

In this complexity of technology and financial, lays what makes necessary that directives know the huge advantages of implementing Business Process Management solutions. With these they can automate all the activities of the company, and this includes having a system recording all the financial movements, expends, payments, investments, incomes, profit, etc. This means that a single integrated system is storing all the information of the movements, which facilitates the execution of calculus operations between different recordings, crossing accountability, and mixing information depending on the needs of the requested reports in an audit. Thus, successful audits are guaranteed.

BPM becomes then the basic tool for financial quality control, this is, the key for the fulfillment of duties that any finance company have, regarding the general public and their users; even more today, that businesses are related and globalization makes that whatever happens in China or USA impacts the economy in the rest of the planet.

Dexon BPM, our solution for process automation, can fulfill this function with complete clarity, because our experience has made us to adapt it to the fulfillment of financial duties of our clients, some of whom are banking entities. Thus, we have seen how technology is indeed an essential key for the success of financial processes in relation to transparency and transactions agility, no matter the amounts managed in each movement. 

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