Take a Close Look at Your Finances

by Sonal Desai    May 18, 2009

Indian companies are warming to the concept of self-auditing over the last two quarters. "Thanks to Satyam, CXOs are realizing the importance of self assessment. GE too has a similar process in place, and is being aided by its consultant ACE," Gautam Rastogi, VP of NewGen. NewGen was recently approached by pharmaceutical major - Ranbaxy for streamlining its BPM in order to gain extra visibility.

With compliance and audits becoming the order of the day, visibility is the key observation. Normally the audit committee members are given the documents about a week in advance. The audit internal control as measurement data is qualitative data, and therefore, it is important to understand how the data is being generated; the process of getting data, etc. And this can provide the committee members to prod deeper, exchange observations, and come prepared for the meetings with an agenda - not necessarily meeting the one set by the management. It is here that the efficacy of the independent directors comes into play.

In any audit, CSA is an important issue, where you compile all information in and from the audit reports. It is then submitted as a checklist. The tool started gaining prominence after clause 49 was introduced.

According to a consultant, although there are no formal rules, some mature organizations document the proceedings. Consultants are hired to formally document the important aspects of business. "A deal is signed on the lines of let us meet half-yearly. At times, accessibility in between is difficult, and the whole process can be pretty time consuming," he said

 "People now realize that there are tools to sustain framework, but also understand that one all applications are no applicable to each thing and process. That is where we come.  We automate the framework and enable sustainability, replication and visibility," said Rastogi.

He asked, "If there is no proper exercise, how can you say that the internal controls are in place? You have to do that because of requirement of clause 49 and the companies act. Suppose there is a mishap like Satyam-you need a board based certification programme. However, in the case of Satyam, there was no intention of false certification, but the approach was not proper. A proper BPM process would have helped."

And as more enterprises wake up to the call, as ICAI becomes more proactive, we can certainly see more transparency in the entire auditing process, and more. Meanwhile, CXOtoday has learnt that Delhi-based JC Bhalla & Co., a member of the MSI global alliance is also streamlining BPM.

Related links:

CXOs to Mitigate Risks with Forensic Data Analysis  
Fraud Allegations are Rumors: Educomp
Ranbaxy Streamlines BPM