RACM Development and ICFR Review admin January 20, 2021
RACM Development and ICFR Review

Customer :

A Leading Manufacturer of Coffee Products across the Globe.

Business Requirement :

The key objectives of this engagement would be to build an entity level Risk and Control Matrix (RACM) for the organization and testing of the Internal Control Framework for the financial year.

Develop Risk and Control Matrix across business operations and processes, ‘As Is’ Business Process Documentation, Identify Risks and Map Risks to Business Processes, Develop Control Design Documentation and Evaluation, Identify Operating effectiveness evaluation, Reporting of deficiencies and recommend ‘Should be’ Business Processes.

Identified Process Challenges :

Understanding of the various data sources in the organization, Unique scenario of handling inventory and fixed assets at customer location, Difficulty in tracking of Spares across the layers of operations, Difficulty in tracking of after sales services and replacement of machines, No periodic review of master data, Multiple quotations not obtained prior to raising of PO / procurement of materials / services, Non-renewal of expired agreements with the customers.

Approach and Solution Design :

Conducted Business Process Understanding activity and identified the flow of data across software and interfaces, Review of stock in hand & asset at customer locations to be done periodically to ensure excess / short materials & assets as compared to our registers, Periodic review, user confirmation & verification of spare parts available at technical centers / Branch needs to be in place, Visit needs to be categorized in software and billing of the same needs to be monitored by Service and finance department. Replacement of machines needs to be approved by Sales, Service, and finance department and same needs to be captured in Software, Key data fields to made mandatory at time of creation / up-dation of masters. Masters to be reviewed on a quarterly basis for correctness and completeness, All procurements should be backed by valid multiple quotes for requisite materials. If not, justification note should be in place, Agreement tracker with alerts to be maintained to keep track of agreements nearing expiry and actioned upon.

Business Benefit and Result :

Orderly and efficient conduct of business, including adherence to company’s policies and safeguarding of its assets, Helps in the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.