Financial Accounting Advisory Services Accounting policy manual solution May 2013
Agenda About EY
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Accounting policy manual solution
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Automated accounting policy manual
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Appendix
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Credentials
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Contacts
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Accounting policy manual solution
About EY
EMEIA Sub-areas Africa Angola, Botswana, Republic of Congo, Equatorial Guinea, Ethiopia, Gabon, Ghana, Guinea, Ivory Coast, Kenya, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Nigeria, Rwanda, Senegal, Seychelles, South Africa, Tanzania, Uganda, Zambia, Zimbabwe
Financial Services Organizations Belgium, Channel Islands, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Switzerland, UK India London
Belgium and Netherlands
Mediterranean Italy, Portugal, Spain
Germany, Switzerland and Austria Commonwealth of Independent States Azerbaijan, Belarus, Georgia, Kazakhstan, Russia, Ukraine, Uzbekistan Central and Southeast Europe Albania, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, FYR of Macedonia, Malta, Moldova, Poland, Romania, Serbia, Slovakia, Slovenia, Turkey France, Maghreb and Luxembourg France, Luxembourg, Algeria, Morocco, Tunisia
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Middle East and North Africa Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Oman, Pakistan, Palestinian Authority, Qatar, Saudi Arabia, Syria, United Arab Emirates Nordics Denmark, Finland, Norway, Iceland, Sweden UK and Ireland UK, Isle of Man, Republic of Ireland
Accounting policy manual solution
EY Global Countries worldwide
140
Employees worldwide
167,000
US$ revenue (2011-12)
24.4b
Accounting policy manual solution
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Accounting policy manual solution
Accounting policy need triggers Accounting policy need across the corporate life cycle Birth
IPOs and other capital markets activity
Sustained operations
M&A activity Performance improvement: ► Shared service center implementation ► Process improvement
Organization and incorporation
Major transaction: Driven by changes in capital structure, new regulatory oversight and other major organizational changes.
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Rebirth | evolution
Risk: ► Internal audit ► ERM
Remediation or improvement projects: Driven by a need to remedy risk events or improve efficiency in organizations. These can occur in any phase of the corporate life cycle.
Accounting policy manual solution
Investments, divestitures, restructurings and M&A
Business as usual: Driven by changes in accounting standards, regulations and business processes throughout the corporate life cycle.
How we view things Four pillars, many options Corporate governance Enterprise risk management Policies
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Policy function
Rapid assessment
Optimization
Governance
Education and deployment
Focus: library
Focus: content
Focus: process
Focus: education
Does your organization have all the policies it needs? Are there redundant policies or gaps, or inconsistencies across geographic or business lines? Are internal customers satisfied with policies? How do your policies compare to those of industry peers?
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Do your organization’s policies comply with GAAP, IFRS, and/or prevailing regulatory requirements? Are they user-friendly? Are they the right length? Are they written in plain language? Are they linked to standard operating procedures (and desk instructions), to form a policy framework that supports the control environment?
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Does your organization have a “policy on policies” that defines when to create, revise or decommission policies, identifies process owners and sets approval requirements? How is consensus and stakeholder alignment achieved? How are policy changes communicated to the organization, and implemented? When are external resources used to aid with drafting?
IT-based solution: automated accounting policy manual (AAPM)
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Accounting policy manual solution
► ► ► ►
Are your policies centrally accessible to employees? Is training provided? Is employee learning monitored? When are external resources brought in to assist in the creation and delivery of training?
How we view things Four pillars, many options (contd) Policies
Rapid assessment Key activities: ► Review policy library ► Conduct end-user interviews and/or surveys ► Perform peer benchmarking ► Establish current state and desired future state ► Communication on new or revised standards and impact on policies or other aspects of your business Deliverables: ► Project charter ► Interview or survey results ► Findings and recommendations
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Policy function
Optimization Key activities: Identify key gaps related to technical or regulatory adequacy, user-friendliness and overall structure ► Conduct interviews with process owners, technical accounting personnel and other stakeholders, to understand concerns and potential issues ► Develop policy prototype ► Draft new or refreshed policies and procedures ►
Deliverables: ► Project charter ► Findings and recommendations ► Policy prototype for approval ► New and refreshed policies and procedures
Governance
Education and deployment
Key activities: Review existing policy governance framework and discuss leading practice governance ► Develop work plan to implement leading practice governance recommendations ► Draft new or refreshed policy on policies ► Create future state process flow ► Establish ongoing communications with company on new or revised standards and impact on policies
Key activities: ► Develop work plan to implement leading practice deployment, education and communication recommendations ► Determine whether manual or technology-enabled deployment is preferred ► Co-develop and deliver education sessions on recent accounting developments, regulatory areas of focus or the policies developed
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Deliverables: ► Project charter ► Findings and recommendations ► New or refreshed policy on policies ► Future state process flowchart
Accounting policy manual solution
Deliverables: ► Project charter ► Findings and recommendations ► New or revised training materials, co-developed with management ► Education sessions and materials ► Listing of technology-enabled solutions for consideration ► Assistance in implementation of technology solution
Benefits Organizations can reduce costs Organizations can reduce costs, improve efficiency and reduce risk by implementing clear and transparent accounting policies. Benefits
Why EY?
Outcomes: ► Accounting and finance policies remain current and in compliance with rules, regulations and business processes. ► Accounting policies are applied consistently within the consolidated, global group. ► Benchmarking with leading practices and peers when adopting new policy positions. ► Design and deliver the most efficient and effective policy and procedure framework to internal customers and stakeholders.
Teaming and collaborative approach Our success with clients is attributable to our flexibility: ► We can be co-sourced with your team. ► We can operate with minimal disruption to you.
Value: Lower regulatory risk ► More effective financial statement close process: ► Reduced close time ► Fewer errors ► Lower costs ► Increased compliance and consistency ► Focus corporate energy on strategic and high-risk areas ► More educated and flexible workforce ►
Strategic insights Our broad experience gained from other projects enables us to bring high-level strategic insights and a commercial approach. Global network We use our global network and draw on the diverse and in-depth skills of teams in more than 75 countries. Proven tools and methodologies Our robust methodologies and technology solutions allow us to hit the ground running, and provide tailored cost-effective strategies.
Critical success factors: catalyst for change, executive sponsorship, stakeholder buy-in, efficient and effective methodology, PMO and third-party support.
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Accounting policy manual solution
Leading practice policies Sample accounting policy contents 1. Table of contents Providing background of company and policy issue helps frame policy and provide context.
4. Regulatory reporting consideration
1 2
Leveraging GAAP and regulatory expertise during policy drafting and creation can assist in efficient incorporation of such information.
2. Scope and purpose Policy includes “plain language” examples and definitions that are specific to the industry.
Including relevant disclosure requirements can help financial reporting employees to meet GAAP and regulatory disclosure requirements.
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3. Hedge accounting requirements The audience is considered throughout the policy (i.e., does the audience have significant accounting expertise, or will additional examples be required to explain key concepts?).
5. Authoritative guidance Including authoritative guidance references helps users to bridge the gap between guidance and company finance policy.
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Accounting policy manual solution
Automated accounting policy manual
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Accounting policy manual solution
Automated accounting policy manual (AAPM) ► ► ► ► ► ► ► ► ►
Web-based accounting policy manual Features views of client products and processes Cross-references between all areas and sites Easy-to-update content Non-sophisticated base technology Easy user and rights management Browse through profit and loss (P&L) and financial statement policies New way of presenting different dimensions of a company’s business Integration into existing ICS (internal control system)
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Accounting policy manual solution
Automated accounting policy manual Benefits Offers a complete overview of the business
No additional desktop-software (SaaS) needed
Search and find functionality
Cross-links to other programs
Simple intranet integration
Reports to track and analyze the manual utilization
Highly customizable, up-to-date content, constant availability, easy access and low maintenance costs
A widely accepted, easy-to-use consistent manual
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Accounting policy manual solution
Automated accounting policy manual Tool presentation Overall entry page with the manifold possibilities: ►
Quick references to all possible views
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Display recently modified pages
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Display recently visited sites
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Display own favourites
View of a statement of financial position structured in: ►
Accounting policies
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Accounting instructions
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Affected IT systems
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Affected products
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Affected processes
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Accounting policy manual solution
Automated accounting policy manual Tool presentation (contd) Products entry page: ►
Quick references to all products
Manufacturing and revenue recognition of a specific product, including the following information: ►
Posting records
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Affected balance sheet items
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Affected P&L items
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Accounting policy manual solution
Automated accounting policy manual Tool presentation (contd) Changemode: ►
Easily insert tables, images and documents
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Four-eyes principle
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Versioning
Reporting functionality to track and analyze tool utilization
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Accounting policy manual solution
Automated accounting policy manual Using simple, readily available technologies EY delivers
EY provides a web-based platform which hosts the accounting manual for you, working with you to develop and update the content.
Client SharePoint
SharePoint makes it easy to store, synchronize and share important content. A simplified user experience helps streamline common tasks, and creates sites to keep teams in sync.
MediaWiki
MediaWiki is a free wiki software application developed by the Wikimedia Foundation and others to power their websites.
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Accounting policy manual solution
Automated accounting policy manual Project schedule Identify
Diagnose
Deliver
Design
Activity
Sustain
Department Business
Project setup
Tool
Content
External support EY IT
Schedule
x
x
x
Resources and organization
x
x
x
Software selection
x
x
x
Check for integration in IT landscape
x
x
x
Scope of application
x
x
Source and format of existing content
x
x
Manually
x
x
Automatically
x
Integration process
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Accounting policy manual solution
x
x
Automated accounting policy manual Project schedule (contd) Identify
Diagnose
Design
Deliver
Activity
Sustain
Department Business
IT infrastructure
Installation x
Integration
Process
Rollout
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IT x
User management
Content
External support EY
x
x
x
Gathering
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Preparation and processing
x
x
x
Input
x
x
x
Definition of further maintenance
x
x
Definition of content delivery
x
x
Testing
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x
x
Workshop
x
x
x
Accounting policy manual solution
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Appendix
Financial Accounting Advisory Services credentials Client
Country
Listed multinational
Italy
Listed multinational
Sector or industry
Service
Service description
Food and beverages
Accounting manual
Improvement of internal processes and accounting systems, accompanied by the development of new accounting guidelines and reporting manuals.
France
Oil and gas
Accounting manual and benchmark analysis
Compilation of a complete accounting manual (collection of existing documentation, interviews with stakeholders, and benchmarks of companies in the oil and gas sector).
Listed multinational
Netherlands
Media and entertainment
Compliance analysis
Client redesigned its accounting manual and the accounting plan to reflect revenue recognition issues. We reviewed its IFRS compliance and tested its implementation in overseas subsidiaries.
Multinational – not listed
Germany
Industrial products
IFRS conversion and related accounting manual
In the course of an IFRS implementation at the group, we supported the preparation of an accounting manual.
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Accounting policy manual solution
Financial Accounting Advisory Services contacts – EMEIA
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Andreas Muzzu
Dr. Detmar Ordemann
Partner
Executive Director
[email protected] + 49 231 55011 22126
[email protected] + 49 711 9881 15438
Accounting policy manual solution
EY | Assurance | Tax | Transactions | Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. © 2013 EYGM Limited. All Rights Reserved. EYG no. AU1784 EMEIA Marketing Agency 1000307 ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.
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