Risk Management & Governance
Risk assessment is central to planning our audits. The risk assessment process gives consideration to the materiality, significance and level of account balances and transactions. The study and evaluation of internal controls are performed as part of the risk assessment process. We prepare detailed narratives on your accounting procedures, the authorization process, and the segregation of duties. We will test the systems on a walk through basis to ensure that the systems are operating as described. Our review of internal controls identifies strengths and weaknesses in your systems and recommendations for improvement. This process identifies factors which indicate the existence of specific risks of material misstatement in your financial statements.
To fully understand the risk of material misstatement at the financial statement level RLB LLP must understand the entity, the business model, the industry, the competition, key relationships and key reporting requirements.
Corporate governance is the set of policies, processes and structures by which companies are directed and controlled. RLB LLP believes that Governance is divided in to three parts: Control the Environment, the Risk Assessment Process and Monitoring of Controls.
- Control the Environment: Governance includes the attitudes, awareness, and actions of management and those charged with governance concerning the entity’s internal control and its importance to the entity such as: communication and enforcement of integrity and ethical value; commitment to competence; participation by those charged with governance; management’s philosophy and operating style; organization structure; assignment of authority and responsibility and; human resources policies and procedures.
- Risk Assessment Process: For financial reporting purposes, the entity’s risk assessment process includes how management identifies risks relevant to the preparation of financial statements that present fairly, in all material respects, in accordance with the entity’s financial reporting framework. Some examples of risk factors include: changes in operating environment; new personnel; new or revamped IT systems; rapid growth; corporate restructuring and; account regulation changes.
- Monitoring of Controls: the question becomes “Are those charged with governance ensuring that a process is in place to assess the quality of internal control performance over time?” Examples of the monitoring of controls are: reviewing communication with external parties; financial review (key performance indicators, rations, etc.); reviewing documented controls (i.e. is the bank reconciliation being done, etc.) and; posing key questions of managers.
Additionally, RLB LLP partners have been contributing authors on risk management and corporate governance with insightful information to such organizations as Accounting Today.
RLB LLP offers their busy clients a number of additional services such as Bookkeeping (including monthly, quarterly or annual reporting), Simply Accounting and QuickBooks training, Payroll, Management Consulting and Human Resource Management.
