From ERP Implementation to Audit Readiness: How to Address Deficiencies and Strengthen Compliance

Addressing Control Environment Deficiencies After Oracle Cloud ERP Implementation

A publicly traded client who had recently completed their Oracle Cloud ERP implementation was facing their first external audit since going live. During this audit, several control environment deficiencies were uncovered, which needed to be addressed before the client’s 10Q financial statement filing. Due to their lack of a robust internal risk and compliance program, Sikich’s Oracle Cloud Risk Advisory team was engaged to assist the client in proving that these deficiencies had no material financial impact and to provide a comprehensive action plan for mitigating risks going forward.

Preparing for Your First Audit Post-ERP Implementation

Oracle Cloud ERP implementations are typically fast paced and financially burdensome, often leaving little time for addressing internal control redesign and compliance. Clients might also be unaware that their initial Oracle Cloud ERP setup could carry hidden risks, such as out-of-the-box roles with inherent Segregation of Duties (SoD) violations, leading to an audit headache. How can organizations stay ahead of audit deficiencies, avoid unexpected audit fees, sidestep the need for third-party remediation, and better prepare for their first audit and overall risk management? Many valuable lessons can be learned from Sikich’s experience with the client who faced these exact issues.

1. Understand the Risks and Avoid Common Pitfalls: Engage internal stakeholders early in the implementation process to identify ERP risk exposure, ensuring that all implementation teams are aware and actively working to update risk and compliance procedures.  The first audit after an ERP implementation often reveals issues such as poorly designed roles and SoD violations, which can be mitigated with careful preparation.
2. Proactive Risk Management: Implement a robust risk and compliance solution, like Oracle Cloud Risk and Compliance Management, alongside your ERP system to manage audit requirements and reduce deficiencies and remediation costs.
3. Utilize Oracle Expertise: Partner with an Oracle specialist who is well-versed in both compliance and audit standards, as well as Oracle technology, to proactively identify and address potential risks and challenges throughout the ERP implementation and beyond.

Leveraging Oracle Cloud Risk Management and Compliance

To prevent unexpected audit findings and manage risks effectively, consider these Oracle Cloud Risk Management and Compliance capabilities:

• Automated Monitoring and Reporting: Real-time monitoring and automated reporting can identify and address potential risks early.
• Advanced Access Controls: Detailed access management ensures only authorized individuals access sensitive data within the ERP system.
• Secure Role Design: Oracle’s Advanced Access Controls aid in designing secure roles and automating security analysis to minimize SoD violations.
• Segregation of Duties Enforcement: Continuous monitoring of user activities helps enforce SoD policies and maintain financial process integrity.
• Change Management: Effective change management features track, authorize, and ensure compliance with internal policies for all IT configuration changes.

Conclusion

Implementing a robust risk management and compliance program with Oracle Cloud is crucial! By utilizing advanced monitoring and systematic controls, you can ensure compliance, safeguard sensitive information, and maintain financial integrity.

Contact Sikich

To learn more about this topic and how Sikich can set up your organization for success post-ERP go-live, contact us today. Our experts are ready to help you build a solid risk management and compliance program tailored to your needs.