| Since the well publicised events surrounding the | | | | account control, reconciliation and certification. |
| collapse of Barings Bank, Enron, WorldCom, and other | | | | Today, the vast majority of organisations world-wide |
| high-profile financial disasters - both in the US and | | | | still rely heavily on (Excel) Spreadsheets to manage |
| internationally - an increasing array of legislation has | | | | this critical process. Spreadsheets are used to accept |
| been put in place to try to mitigate the future risk of a | | | | a download of accounts from the GL; to track |
| repeat of these catastrophic (in the business context) | | | | responsibility for ownership of the reconciliation and |
| events. | | | | review; to track the completion of the reconciliation, |
| In the US, the Sarbanes Oxley Act of 2002 demanded | | | | review, and sometimes Approval, of each |
| a much greater level of accountability for Directors | | | | reconciliation; to track queries (open reconciling items); |
| and in the UK, similar demands of business | | | | and to attempt to aggregate the value and |
| stakeholders were made through the Combined Code | | | | categorisation of those open reconciling items for the |
| on Corporate Governance originally published in 1998 | | | | purposes of assessing materiality. |
| (revised 2003) and in the revised Companies Act | | | | Specialist (Web-based) tools for the automation of the |
| 2006. | | | | GL account certification process have been |
| The result has been a significant increase in corporate | | | | developed (resulting in the elimination of Spreadsheets |
| cost, both in terms of in-house operational and | | | | from the process). These tools are comprehensive, |
| management costs as well as external Audit, | | | | encompassing reconciliation preparation, review |
| Consultancy and other specialist fees to achieve and | | | | approval, quality assurance testing (Audit), aggregation |
| maintain compliance. A substantial portion of this cost | | | | of open reconciling items, reporting and improved |
| has been as a result of defining and implementing | | | | program management. The solutions are starting to |
| additional, time-consuming (and often manual), control | | | | make major inroads in helping organisations with |
| processes, review structures, and certification | | | | thousands (to hundreds of thousands) of GL accounts |
| processes all geared toward the provision of | | | | to finally take complete control of the process - whilst |
| documentary evidence of control around the | | | | driving real monetary benefit through efficiency and |
| processes organisations already had in place. Having | | | | time-saving at the same time as ensuring compliance. |
| achieved compliance first time round, the number of | | | | Organisations with a distributed National or International |
| organisations electing to replace these manual control | | | | infrastructure are particularly well suited to this type of |
| processes with technological, best of breed, process | | | | Web-based technology that provides for global visibility |
| automation and improvement tools has increased | | | | into the status of the reconciliation program. |
| significantly. Few more so than in the area of GL | | | | For more information contact Ted Sparrey. |