The FRC announced an Audit reform including the operational separation of the Big 4, but what does this mean?
Beyond COVID - Minimise risk & safeguard your business
22 May 2020
The current challenges that we all face have undoubtedly put pressures on the way that we work in our businesses today. The situation has made many business owners drive to find quicker and more flexible ways to solve issues in order to move forward and keep working. The well-worn phrase that “Necessity is the mother of invention” has perhaps never been truer. Quick fixes and the shortening of decision processes have been needed to keep agile and flexible – and these quick fixes may become the basis for the new way of working in the future.
Is this something you recognise and have you stopped to consider what impact these “work-arounds” will have for future control and the security of processes in your business?
New challenges that could effect you
Changes in the way that processes work or controls are implemented could have serious consequences for your business in the future. Controls and authorisation processes might have been overridden. Segregation of duties that previously applied may have been put to one side. Day to day pressures and changes to established daily routines may mean business controls are not as robust now. This might open you up to trading and operational risks that might have serious implications. Is this a concern that you are starting to feel for your business? Have you already seen aspects of the visibility control of your business that have started to creep beyond that which makes you comfortable?
Changing the way you work but not the control you have
How you’re working today will mean you’ll have to think of new ways of working tomorrow. Understanding the new norms and ensuring that you have reasonable levels of control and governance around these processes and activities will be important.
Taking the time to think through:
• Processes, business strategy and associated risks.
• How you now work with customers and suppliers to build clearer and more effective working relationships.
• How your team work together and how new or emerging roles and responsibilities are agreed and put in place (and reinforced).
• Monitoring and visibility across your business when you are trying to re-energise it.
• Whether your management and team have the capabilities to address the risk in the new business environment.
• How you re-establish the controls that are important to you and the business in terms of the risk assessment?
• Access to information needed to safeguard the business and make the right decisions quickly & effectively?
• Contingency and business continuity planning for future scenarios.
New ways of operating will clearly have their challenges but covering potential business risks and the control activities and processes around this is crucial. It will be vital to business that they approach these challenges with a clear head and focus on what is critical to the business and also avoid some of the noise that will accompany a return to (new) normal.
The Assurance Team at Fortus are working together with many business owners on re-assessing and developing financial and business control and governance structures around new working practices. Doing this now ensures their business minimises risk and safeguards the future of the business.
We offer the benefit of being able to help you assess what is in place, often simplifying things and provide a sounding board that will help you to identify what is business critical and what is not. Being able to work through these areas together often drives greater structure to the business and its activities. It provides some peace of mind that in turn allows focus on driving business activity and revenues rather than looking over your shoulder, and being distracted by concerns about potential risks and uncertainties that can often niggle away in our thoughts.
Ask yourself these questions:
- Do I understand the financial and operational risks as they now exist in my business?
- Do I have controls in place to provide reasonable mitigation of these risks and let me know when the business is pushing against the parameters set?
- Can I provide the necessary comfort to other stakeholders that the business can run effectively and in a structured and controlled way in the future?
- Given the efforts and strain that might fall upon the business in the coming months of renewing activity, do you know that your efforts will be safeguarded and any lack of control of authorisation around processes will not put recoveries and gains at risk?