The Issue
A diversified group was facing repeated statutory audit qualifications and delays in financial closing due to:
- Weak controls over revenue recognition and accruals
- Lack of documentation and audit trail for journal entries and adjustments
- Inconsistent application of accounting policies across business units
- Limited understanding of financial control responsibilities among process owners
- Absence of a formal ICOFR framework and control testing mechanism
- This resulted in high compliance risk, investor concerns, and challenges in obtaining clean audit opinions.
Affiniax Approach
Our approach included:
- Conducted process walkthroughs across key financial areas: revenue, receivables, procurement, payables, fixed assets, payroll, and financial close.
- Mapped end-to-end process flows and identified risk and control points.
- Developed a risk control matrix (RCM) covering entity-level and process-level controls.
- Identified and documented manual and automated controls, and defined roles/responsibilities for control ownership.
- Designed control testing procedures, sampling techniques, and control effectiveness assessments.
- Provided remediation plans for design or operating effectiveness failures (e.g., lack of documentation, inadequate review mechanisms).
- Conducted training workshops for control owners and finance teams on internal control awareness and documentation best practices.
Impact Delivered
- Established a centralized ICOFR framework and repository of controls, improving consistency across all units.
- Enabled timely and accurate financial reporting through effective risk mitigation and error prevention.
- Reduced reliance on manual journal entries by identifying system-based controls and automations.
- Supported external audit readiness with detailed control documentation, evidence, and walkthrough packs.
- Enhanced control culture and ownership across departments, enabling smoother financial close processes.
- Positioned the company to achieve clean audit reports, enhancing investor confidence and governance image.
To learn more about how Affiniax can help you, please contact us at mail@affiniax.com.
