CFO Magazine and Duke's Fuqua School of Business published their quarterly Top 10 Concerns of CFO's on May 1, 2008, and this quarter's list seems to demonstrate the potential benefit of more frequent and more in-depth controls monitoring and auditing procedures. To read the article in full, please click thru to: http://www.cfo.com/article.cfm/11078610/c_11081639?f=insidecfo
Though most CFO concerns are repeats from previous quarters (e.g. weak consumer demand, credit markets, and the housing market fall-out), a couple of new entrants demonstrate the potential value of continuous auditing and monitoring. Specifically, Costs of Health Care, Costs of Fuel and Costs of Non-Fuel Commodities all represent opportunities, based on our current experience with Continuous Auditing (CA) and Continuous Monitoring (CM).
Visual Risk IQ is currently working with several large global enterprises on pilots of continuous auditing and monitoring in the areas of Procurement Card (P-Card), Travel and Entertainment (T&E) and Employee Health Benefits. Examples of P-Card and T&E issues identified by CA / CM include 40 and 50 gallon fuel purchases for employees who drive company cars with 15 gallon tanks. No matter what the cost of fuel per gallon, using Company funds to fuel a personal boat or the neighbors SUV(s) is not inappropriate. In the case of Employee Health Benefits, we will be using sophisticated data mining and analytics to find claims that have been paid by a Company's Third Party Administrator where the claims are not in compliance with the Summary Plan Description.
Going back to recover Health Claims, T&E or P-Card expenditures that have been paid in error is sometimes perceived as a time-consuming and costly process. However, use of modern CA and CM software can dramatically reduce the cost of detecting these errors. Further, because the errors can be detected closer to the transaction date (and often before the payments are made!), the investment in CA / CM can pay for itself many times over.
Stay tuned, as we hope to chronicle some of the specifics of these reviews....
Joe Oringel
Visual Risk IQ
Charlotte, North Carolina
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment