Implement 5 Key Controls to Mitigate Risk in Your Financial Closing Process

  • by Anurag Barua, Independent SAP Advisor
  • December 15, 2009
See five scenarios that commonly produce risk — and how to address them with configuration.
Key Concept

Enterprises should strive to make their financial closing operation as efficient and risk-free as possible by exercising due diligence in the activities that contribute to a successful closing. Implementing these controls can help mitigate risks associated with financial closing.

In any SAP application or module, auditors expect you to implement numerous application controls. Having these controls in place is important not only from an audit perspective, but also for risk management and mitigation. Each enterprise has a set of application controls that are most critical to its operational well-being and efficiencies.

Of the myriad financial processes that an enterprise runs, one of the most important ones is the financial closing process. If your enterprise uses SAP as its financial system of record, you are almost certain to be running your financial closing in your SAP system. It goes without saying that you want adequate controls to be in place for this most critical activity. While there are numerous risks and accompanying controls in the financial closing process, I will discuss only five specific control risks that every enterprise faces in the financial closing area, their potential impact, and what you can do to mitigate such risks. I have chosen these five risk scenarios because of the high frequency of their occurrences in my experience with SAP financials modules and sub-modules.

Anurag Barua

Anurag Barua is an independent SAP advisor. He has 23 years of experience in conceiving, designing, managing, and implementing complex software solutions, including more than 17 years of experience with SAP applications. He has been associated with several SAP implementations in various capacities. His core SAP competencies include FI and Controlling FI/CO, logistics, SAP BW, SAP BusinessObjects, Enterprise Performance Management, SAP Solution Manager, Governance, Risk, and Compliance (GRC), and project management. He is a frequent speaker at SAPinsider conferences and contributes to several publications. He holds a BS in computer science and an MBA in finance. He is a PMI-certified PMP, a Certified Scrum Master (CSM), and is ITIL V3F certified.

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