FESA CONSOL

FlexSystem

Evolution of Advanced Accounting Automation

 

Advanced accounting automation refers to the implementation of various processing models that are usually deployed over computerized systems. These either reduce or eliminate human interaction in respect of different accounting processes so as to maintain both the integrity of accounting records as well as meeting any statutory compliance requirements.


 

Financial close 

The financial close process describes a company's ability to complete its accounting cycles and to produce financial statements for internal management and external legal reporting purposes often working under intense time and resource pressure. This is attributed to the last mile of financial reporting in an accounting cycle where seeking regulatory compliance for Sarbanes-Oxley, fair value accounting standards, and the XBRL mandate have significantly increased the period end workload thus negatively impacting the efficiency of the closing process.


The financial close of a legal entity is distinguished from the financial close of a multinational corporation with its independently operated and geographically dispersed business units as the process involves continual adoption to diverse regulatory environments as well as frequent changes in group structures.


 

Internal control 

Internal controls are an important part of the financial close and one critical area relates to their application over the financial reporting process. It may vary for different companies but controls generally include the five components which were outlined in the recently updated COSO framework (COSO 2013) which are defined as Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring Activities.

 

 

Operational issues

The scoping for advanced accounting automation suffers from a variety of operational issues that occur from changes in both internal and external environments and it is worthy of note that not all businesses fully recognize that automation can actually maximize the return from their investment in the  underlying accounting infrastructure.


 

Different view of advanced accounting automation

Advanced accounting automation is differentiated from traditional accounting and ERP software as it deals with the bigger picture relating to the internal workings of what must happen in the last mile of finance. The references below describe advanced accounting automation by looking at the evolution of the accounting process. 

 

  Evolving from manual accounting to computerized accounting 

  Evolving from accounting issues to automation issues

 


 

AVESTA Related Articles

  


 Evolution of accounting model

 Postmodern accounting equation

 The rise of group consolidation & budgeting

 Evolution of advanced accounting automation

 Aggregation ► Versioning ► Elimination ► Standardization  Tagging ► Alert

 Evaluation of AVESTA computing issues

 Three progressive phases of implementation

 Finance Computing Framework