— COVID-19 responses have focused on building and sustaining longer-term process resilience —
Sponsored content: The following insights are from Conor O’Kelly, senior director, statutory accounting, at Workiva, provider of the world’s leading connected reporting and compliance platform.
The sharp macro-economic shock of COVID-19 continues to be felt on a week-by-week basis as business and financial controllers adjust their reporting processes to the new normal. Gaps have been exposed in disconnected, desktop processes at the local GAAP level, in local ledger setup, and in review cycles, which vary from locality to locality and from subsidiary to subsidiary.
Local legal entity disclosures and narratives remain disconnected in traditional systems, leading to ad-hoc manual workarounds that have increased the effort to maintain key controls and integrity. And, local knowledge (process, organizational, and regulatory) vested in individual staff members and desktop processes have been tested over recent weeks.
These desktop processes are seldom automated end to end, requiring multiple manual iterations and interventions to manage the process in full, while rarely achieving operating efficiency benefits from central investment that would have delivered economies of scale. In fact, when you sit down and audit them in full, quite often, they're found to be broken.
In recent weeks, new reporting requirements centered on COVID-19 impact and response have emerged. These requirements include board decisions, management estimates, auditor opinion, and employee welfare.
In response to this, the trend across finance and compliance has been to accelerate the centralization of reporting processes around cloud-enabled platform as a service (PaaS). The cloud-based platform approach connects the rapid changes in accounting estimates and data collection with remote staff, GAAP frameworks, management estimates, and the gathering of data from sources that may not previously have been used for statutory reporting, such as local health statistics, hospital admissions, and personal health records.
Corporate finance teams have quickly learned that the ability to collate pandemic impact reporting, management estimates, audit opinions, post balance sheet events, impairments, and updated regulatory guidance depends on the company's ability to both rapidly and frequently assimilate semi-structured and unstructured data, curate that data on the fly, orchestrate it downstream, and formulate it into actionable insights based on accounting and regulatory standards.
These are the areas where traditional desktop-based systems of work break down and are particularly difficult to control, especially now when back office and shared services support functions have been disrupted.
Even more so now, this requires companies to assert both control and flexibility over their systems of work to connect business insight with governance and assurance.
Corporate finance teams are rightly preoccupied with building longer term sustainable process resilience across their existing business reporting processes and audit checks. Organizations that have moved to a cloud-based platform approach experienced little disruption compared to those still using desktop solutions that lack the flexibility to quickly adapt.
As we emerge from the pandemic, the control, traceability, collaboration, trust, and risk reduction offered by the integration of cloud-based platforms with systems of record are proving to deliver long-term sustainable reporting benefits.
For more information on Workiva, please visit workiva.com.