Interview-Fact Sheet Record to report (R2R) Process_Day 2

Fact-Sheet Inala - “Record to report” (R2R) Process Character’s and situation backgrounds
Production Manager:
joined Inala for 27 years
started as machine operator and advanced through the ranks and is production manager since more than 15 years
coordinates the operations of Inala’s North American factory
primary goals are ti ship orders on time and to keep the factory staffed, maintained and running smoothly
Director of Accounting:
joined Inala for 12 years
started as an accounting manager and was promoted to director of accounting 6 years ago
one of his primary responsibilities is supervising the quarterly financial closing and ensuring that operating reports are completed
and filed with government regulatory agencies
as the company has grown and implemented more automated accounting systems, he expected the closing process to become
more streamlined. Instead, closing takes longer than ever.
The CFO expects the whole process, from transaction cutoff to report sign-off, to take no more than 12 business days Description of quarterly process at Inala
Financial statement close process takes 14 business days to complete, while competitors on average take 10 business days to
complete their process
Accounting team is responsible for consolidating the reports from all three regions
Three days before cut off:
Stop pulling new order from production queue
Stop releasing raw materials from inventory
Add overtime hours for final push to finish orders already in production
Cutoff day:
Complete orders in process and move to shipping
Count materials inventory
Count finished products awaiting shipment
Isolate orders in process —if none in process, skip to “After cutoff”Calculate work-in-process value:
Determine value of materials already used for orders in process
Determine number of labor hours already applied to work on orders in process
Estimate percent completion of orders in process
Apply percent completion to calculate inventory value of partially completed orders
After cutoff:
Reconcile discrepancies in inventory counts, inventory database, labor hours
Request permission from Corporate to resume production — if no, continue reconciliation; if yes, resume production
Resume production:
Resume releasing orders from production queue
Resume releasing materials from inventory
Submit inventory valuations to corporate accounting
Risks and controls for Inala
Pick up on the following issues with the RACM:
There are multiple risks that do not have controls associated to them.
All but two of the controls are access related, which indicates that the system is not configured with the appropriate controls, or there
are not appropriate manual controls in place to make sure the
process works appropriately.
Internal Audit should have updated the RACM to capture all of the controls in the process. It is not my responsibility to determine
what the appropriate controls should be; Inala expect that Internal
Audit tell them what controls should be in place.
Inala expected the new system would be configured to handle all of the standard controls within the procure-to-pay process.
Ultimately, Inala thinks that system integrator did not do enough
to ensure we would have appropriate controls in place within the
system.。