5 Benefits of controls automation

The increasing number of transactions in ERPs systems makes it hard to comply with anti-fraud regulations for top-level executives when it comes to their financial reports.  

One of the biggest challenges of CFOs is juggling with time and resources allocated to internal controls to comply with anti-fraud regulations. Most companies have designed a complete controls framework to reduce the risks of errors and fraud in their financials. Mostly done manually, these controls are today still based on sampling methods. Hence why moving to an automatic system for controls and processes ensures a flawless financial report.

Here are the 5 main benefits of controls automation: 

1. From sampling to Testing the entire population 

Controls automation enables companies to analyze 100% of the data in comparison to manual controls, which only test a sample of data.  

Technology is now able to analyze and cross-check the full population of GL entries, AR, AP, Master Data, User Data, which extends both the audit scope, leaving no room for error in their financial statements, and the frequency of performing the controls. Companies can test the entire population continuously instead of conducting one-off audits at the end of each year. 

2. Cutting down testing time 

With automated controls, testing is instant and automatic. Therefore, the operational team can focus on what matters: analyzing errors and fixing them.

Automating our controls reduced our headcount of 9 FTEs and save countless administrative hours of manual testing while expanding significantly our audit scope

said the head of accounting of Egis, a billion-dollar company, that is using Supervizor to automate its controls. 

3. Reduce the personal risk of the CFO  

In 2021, the SEC recorded an all-time high of $3.9 billion in fines for companies, proving that financial statements aren’t as accurate as they should be. Automation software ensures accurate accounting reports by covering high-risk areas with continuous automated controls, so CFOs can confidently sign SEC certification documents such as SOX 302 & 404 for public companies.  

4. Ensure compliance with antifraud regulations 

As per a study conducted by Protiviti, average annual spending on SOX compliance exceeds $1 million, and the time spent on compliance testing increased by 10 % on average from 2019 to 2020. Controls automation assists with compliance for both the company’s national and international entities, automatically detecting irregularities in financials. Finance teams can catch these errors firsthand, making it easier to abide by anti-fraud regulations. 

5. Decrease Audit fees 

According to Gartner’s report, controls automation decreases companies’ external audit fees by 27%, when at least 25% of a company’s controls were automated. Because automated controls catch anomalies and frauds beforehand, companies can leverage this tool to negotiate better fees with their external auditors. 

A fit for all businesses 

Automated controls aren’t just limited to large companies and specific sectors, they can be used for all organizational sizes and sectors, public and private. Investing in the right solution can help companies stay sustainable and mitigate known and unknown risks.