VIEWpoint Issue 1 | 2023
2023 Compliance Trends: Staying Ahead in an Evolving Regulatory E...
2023 Tax Calendar
As you scale your business, your focus is primarily on new growth opportunities, building your brand and executing your business strategy. After a while, keeping track of all the day-to-day business operations gets tedious. Without a system of checks and balances in place, there could be significant losses for your business financials.
According to the Association of Certified Fraud Examiners (ACFE) 2020 Report to the Nations, a lack of internal controls is the primary weakness contributing to fraud. The report also states small businesses are at the highest risk because they generally have fewer anti-fraud controls in place, making them more vulnerable (to losses as great as $200,000 annually).
Internal controls allow for more risk management and accuracy in your financial reports, preventing various fraud attempts and encouraging accountability.
Sage Intacct, a cloud-based financial management solution, uses the following five elements to strengthen internal controls and increase their effectiveness:
With airtight data security, your business is protected from data breaches and unauthorized access to sensitive financial information. Sage Intacct’s login process is secure, with the measures in place to protect your business. To name a few, they include:
Create role-based and user-based permissions within Sage Intacct to give employees access to only the resources they need. User permissions allow businesses to build out their system and implement more efficient workflows and custom dashboards. User permissions help to increase your operational efficiency and limit the access of certain modules to specific users.
Segregating financial duties is a key principle of good internal controls and a requirement of SOX compliance. Designating steps of your workflow to different employees (maintained by user permissions) will prevent the same employee from completing an entire multi-step process on their own —substantially minimizing fraud.
An approvals process is needed for routine data maintenance and to prevent internal fraud or inaccuracies in your financial data. An administrator can set custom thresholds for approvals, and once a transaction meets that threshold, it’s flagged. This also promotes segregation of duties by requiring users with higher-level permissions to approve transactions.
Used as a comprehensive record to track user activity, audit trails note who accessed certain records, made changes and when those changes occurred. This careful documentation is embedded into Sage Intacct and provides financial managers an internal log of key information needed for audits. This log includes:
Putting a proper internal controls system in place will help safeguard your business and prevent your business from organizational fraud.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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