Oracle ifrs focus on grc final

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Oracle ifrs focus on grc final

  1. 1. <Insert Picture Here> Preparing for the Transition to International Financial Reporting Standards (IFRS) with Oracle Governance, Risk, and Compliance Sean Cronin – GRC Sales and Strategy Director Stephanie Holmeen - Product Marketing Director, GRC Applications
  2. 2. IFRS: Why Should You Care? • • • • IFRS is coming for customers in Canada and US Major change in accounting and reporting The transition process needs to start now Can be a compelling event for Oracle Sales: – Upsell to Hyperion Financial Management – Upgrade to E-Business Suite Release 12, PeopleSoft 9, JD Edwards EnterpriseOne 9, and JD Edwards World A9.1 – Cross-sell GRC
  3. 3. Agenda • • • • IFRS Overview Oracle and IFRS Focus on IFRS with Oracle GRC Summary <Insert Picture Here>
  4. 4. Global Momentum Towards IFRS Countries that require or permit IFRSs Countries seeking convergence with the IASB or pursuing adoption of IFRSs Source: IASB, Dec 2007
  5. 5. Expected Benefits from IFRS Convergence A single standard for global business More efficient access to capital Reduced cost of financial reporting Improved transparency for investors It’s Not About Accounting; It’s About Capital Markets
  6. 6. Impact on US Companies Proposed implementation timeline from the SEC 2009: Limited group of large US firms are permitted to use IFRS on an optional basis for fiscal periods ending on or after Dec 15, 2009 2009 2010 2014: Large accelerated filers begin filing in IFRS 2011 2012 2011: SEC evaluates achievement of roadmap milestones and decides whether to adopt a mandatory approach for IFRS Source: SEC Announcement, Aug 2008 2013 2014 2016: Nonaccelerated filers begin filing in IFRS 2015 2015: Accelerated filers to begin filing in IFRS 2016
  7. 7. Impact on US Companies The value of starting early Growing awareness of complex requirements… …drives preference for early planning and assessment Within what timeframe would your company adopt IFRS if given a choice? Cumulative Reporting Requirements Companies are required to retrospectively apply IFRS to all periods presented as if they had always been in effect. Multi-GAAP During Transition During the transition period from US GAAP to IFRS, firms must continue to report in US GAAP and any local statutories, as well as begin tracking IFRS equivalents. Don’t Know 9% More than 7 years 2% Within 7 years 8% Within 3 years 55% Within 5 years 26% Source: Deloitte, 2007 Potential Impact on Bottom Line A study comparing of the impact of IFRS adoption in the UK reveals that net income generally rose by 39% while equity declined by 23%. UK GAAP is considered close to US GAAP in most areas. “ No one anticipated how big it was going to be. Every company was too late and too slow in preparing – even the good ones.” Ken Wild, Global IFRS Leader, Deloitte Sources: European Financial Reporting Research Group; Deloitte Touche Tomatsu
  8. 8. Impact on US Companies Start early for transition period with multi-GAAP 2009: Limited group of large US firms are permitted to use IFRS on an optional basis for fiscal periods ending on or after Dec 15, 2009 2009 2010 Transition Date? While IFRS requires 2 years of 2014: Large comparatives, best practice accelerated recommends 5 filers begin 2016: Nonaccelerated filers begin filing in IFRS filing in IFRS 2011 2012 2011: SEC evaluates achievement of roadmap milestones and decides whether to adopt a mandatory approach for IFRS Source: SEC Announcement, Aug 2008 2013 2014 2015 2015: Accelerated filers to begin filing in IFRS 2016
  9. 9. US GAAP vs IFRS: What’s Different? You can make a living cataloging the differences US GAAP: 25,000 Pages IFRS: 2,500 Pages
  10. 10. Much is the Same… Approach (Some Examples) Revenue Recognition Fair Market (e.g. AR or Inventory Valuation) Detailed Disclosure Segment Reporting Chart of Accounts Not Mandated Distinction Between Tax and External Reporting IFRS US GAAP
  11. 11. …But There are Differences US GAAP is always more specific, plus: Approach (Some Examples) IFRS US GAAP Fixed Assets & Investments Only Certain Fixed Assets None Rare (Negative Goodwill) Consolidation Control 2 Models Joint Ventures Proportional OK Only Equity Capitalized Expensed No LIFO LIFO OK 1 Step, Reversible 2 Step, No Reversal Fair Market Revaluation Extraordinary Items Research & Development Inventory Impairment
  12. 12. Industry-specific Considerations Areas of Potential Concern IFRS Change Area: PPE R&D FV INV IMPAIR Financial Services High Tech Retail Communications Utilities CPG Life Sciences PPE = Property, Plant, & Equipment INV = Inventory R&D = Research & Development IMPAIR = Impairment FV =Fair Market Revaluation M&A = Mergers & Acquisitions M&A
  13. 13. Agenda • • • • IFRS Overview Oracle and IFRS Focus on IFRS with Oracle GRC Summary <Insert Picture Here>
  14. 14. Your IFRS Action Plan Achieve “early mover” advantage Stage 1 Study Impact & Determine Strategy Enable Top End Reports Stage 3 Stage 4 Record Transactions in both GAAPS Transform Your Business & Win with IFRS Stage 2 Perform preliminary study Collect GAAP financial results Determine impact on accounting in subsystems Determine changes to business model Assess impact Adjust and consolidate under GAAP & IFRS Configure accounting rules and set up ledgers Transform operations using IFRS results Determine strategy Report, reconcile and audit results Process and report using dual accounting Report IFRS results, increase shareholder value All Stages: Apply Policy and Control Management Milestone 1 Completed Preliminary Study Milestone 2 IFRS Reports Produced Milestone 3 Transactions Recorded in Multiple GAAPs Milestone 4 Business Model Optimized 15
  15. 15. Oracle Enables Key Stages in IFRS Action Plan Stage 1 Stage 2 Study Impact & Determine Strategy Enable Top End Reports Stage 3 Stage 4 Record MultiMulti-GAAP Transactions Transform Your Business & Win with IFRS Oracle Enterprise Performance Management Oracle ERP Financials Other ERP Financials Custom or Legacy Oracle Industry Specific Applications Oracle Governance, Risk, & Compliance Suite All Stages: Apply Policy and Control Management 16
  16. 16. Oracle Enterprise Performance Management Enable Top End IFRS Reporting CORE CONSOLIDATION FEATURES Multiple reporting standards in a single solution GAAP IFRS CUSTOM DIMENSIONS Enables tracking of GAAP vs. IFRS adjustments Flexible Rules Engine Journal Entries and Audit DOCUMENT ATTACHMENTS Creates “Electronic Binder” of all adjustments FLEXIBLE REPORTING Easy to reconcile and trend GAAP vs. IFRS results 17
  17. 17. Oracle ERP Financials Designed for IFRS E-Business Suite, PeopleSoft, JD Edwards IAS/IFRS SUPPORT SINCE 2000 Thousands of customers overseas reporting under IFRS IAS 2 IAS 16 IAS 18 IAS 21 More … Inventory Property, Plant Revenue Rec. Currency Segments, etc. … Inventory, Costing FA, ALM OM, AR, BI, CA Multibook, MRC,GL Flex / ChartFields … DUAL GAAP ACCOUNTING Ledger Set/Code: SPECIFIC IFRS FEATURES Specific functionality developed for IFRS • Asset Componentization Parent & Child Assets Child Depreciation rates differ • Impairment Processing Impairment identification Unplanned depreciation IFRS MIGRATION PATH Multiple Ledgers or Multi-GAAP GAAP US Principles Expanded COA Calendar USD Differences Expanded COA Calendar USD 18
  18. 18. Oracle Governance, Risk, and Compliance Suite Manage changes to policies and controls GRC DOCUMENTATION REPOSITORY COMPLIANCE WORKFLOW Record changes to business process due to IFRS Automate steps to audit IFRS compliance APPLICATION CONTROLS MONITORING Single subledger transaction creates multiple accounting representations Control changes to ERP applications COMPLIANCE DASHBOARDS Monitor status of testing and exceptions 19
  19. 19. Agenda • • • • IFRS Overview Oracle and IFRS Focus on IFRS with Oracle GRC Summary <Insert Picture Here> 20
  20. 20. Oracle Governance, Risk, and Compliance Suite Manage changes to policies and controls GRC DOCUMENTATION REPOSITORY COMPLIANCE WORKFLOW Record changes to business process due to IFRS Automate steps to audit IFRS compliance APPLICATION CONTROLS MONITORING Single subledger transaction creates multiple accounting representations Control changes to ERP applications COMPLIANCE DASHBOARDS Monitor status of testing and exceptions 21
  21. 21. Manage IFRS Policies, Controls and Risks Align processes to IFRS Standard specific to IFRS Documentation of policies and processes Central repository for policy, risk & compliance documentation Alignment of processes and associated controls to IFRS standard Standards & Mandates Easily compare US GAAP and IFRS policies and processes during transition Standard specific to IFRS Risk and Compliance Process Document Risk and Control Matrix Assess Scope Based on Risk Test Controls and Analyze Exceptions Remediate and Optimize Certify and Publish 22
  22. 22. Risk and Control Matrix Identify risks and record changes to controls Risks Single system of record for risk and controls Document control changes to comply with IFRS Controls Standards & Mandates Adjust audit scope to new controls and risks Standard specific to IFRS Risk and Compliance Process Document Risk and Control Matrix Assess Scope Based on Risk Test Controls and Analyze Exceptions Remediate and Optimize Certify and Publish 23
  23. 23. Oracle Governance, Risk, and Compliance Suite Manage changes to policies and controls GRC DOCUMENTATION REPOSITORY COMPLIANCE WORKFLOW Record changes to business process due to IFRS Automate steps to audit IFRS compliance APPLICATION CONTROLS MONITORING Single subledger transaction creates multiple accounting representations Control changes to ERP applications COMPLIANCE DASHBOARDS Monitor status of testing and exceptions 24
  24. 24. Automate and Streamline Audit Audits become crucial with the IFRS principles-based approach Sign-off and Publish Certify Remediate Retest Optimize Receive Alerts Review Reports Investigate Exceptions Respond Analyze Assess Perform Self Assessment Scope Audits Test Manual Controls Monitor Automated Controls By allowing a higher degree of interpretation, IFRS makes audits even more important Documentation, assessments, tests, issue tracking and remediation are evidence of reasonable judgment Easier sign offs over the integrity of financial reporting - Risk-Control Matrix of IFRS vs. GAAP Document Differences - Policies and Procedures - Evidence & Records Retention 25
  25. 25. Oracle Governance, Risk, and Compliance Suite Manage changes to policies and controls GRC DOCUMENTATION REPOSITORY COMPLIANCE WORKFLOW Record changes to business process due to IFRS Automate steps to audit IFRS compliance APPLICATION CONTROLS MONITORING Single subledger transaction creates multiple accounting representations Control changes to ERP applications COMPLIANCE DASHBOARDS Monitor status of testing and exceptions 26
  26. 26. Support of IFRS Calls for Stronger Application Controls Enforce proper access in applications • Policy Library • Conflict Paths Simplify segregation of duties enforcement with simulation and remediation Mitigate risk of privileged user access to enterprise applications with approval workflow and audit trails Accelerate deployment and time to value with pre-delivered controls library Prevention Detection Define Access Controls Access Analysis Remediation (Clean-up) Preventive Provisioning Compensating Policies 27
  27. 27. Support of IFRS Calls for Stronger Application Controls Ensure integrity of critical application setups Achieve consistent application setup and operating standards across multiple instances Track complete audit trails for changes to key configurations Tightly control change management to accelerate development and test time Prevention Detection Define Configuration Controls Document or Compare Configurations Monitor Configuration Changes Enforce Change Control Manage Data Integrity 28
  28. 28. Support of IFRS Calls for Stronger Application Controls Identify inaccurate or fraudulent transactions Continuously monitor accuracy of transactions and mitigate exposure to fraud • Test against thresholds • Search for anomalies • Perform transaction Pre-delivered Transaction Controls Suspect Transactions sampling Prevention Detection Define Transaction Controls Perform Transaction Analysis Review and Address Suspects Preventive Transaction Controls 29
  29. 29. Oracle Governance, Risk, and Compliance Suite Manage changes to policies and controls GRC DOCUMENTATION REPOSITORY COMPLIANCE WORKFLOW Record changes to business process due to IFRS Automate steps to audit IFRS compliance APPLICATION CONTROLS MONITORING Single subledger transaction creates multiple accounting representations Control changes to ERP applications COMPLIANCE DASHBOARDS Monitor status of testing and exceptions 30
  30. 30. Enterprise Visibility into IFRS Compliance Timely access to information, better decisions 100+ pre-built KPIs for Risk, Certification, Controls, and Issues enable personalized reporting Self-service analysis and reporting with interactive dashboards and automated alerts Integrated IFRS compliance information GRC Reporting & Analysis Review GRC Dashboards Configure Risk and Control KPIs Investigate Troubling KPIs Monitor All Open Issues 31
  31. 31. Oracle Solutions for GRC GRC Reporting & Analytics Access Policy KPIs Risk & Control KPIs Certification KPIs Purpose-built business solutions for key industries and GRC initiatives GRC Process Management Documentation & Reporting Management Assessments Issues & Remediation GRC Application Controls SOD & Access Application Configuration Transaction Monitoring GRC Infrastructure Controls Identity Mgmt Data Security Systems Mgmt Best-in-class GRC core solutions to support IFRS and other mandates Records & Content Mgmt Digital Rights Pre-integrated with Oracle applications and technology, supports heterogeneous environments Custom or Legacy Applications 32
  32. 32. Agenda • • • • IFRS Overview Oracle and IFRS Focus on IFRS with Oracle GRC Summary <Insert Picture Here>
  33. 33. Key Takeaways Start Early • Use the benefit of a realistic implementation timeline – don’t wait for the pressure of mandatory deadlines • IFRS resources are scarce – start planning and education sooner rather than later • Report using IFRS principles with Oracle EPM Leverage Technology • Push changes into general accounting with Oracle ERP Financials • Document and test IFRS controls with Oracle GRC Optimize Your Business • Consider how to optimize your business and gain competitive advantage through IFRS • Align your business model with the new capital market model 34
  34. 34. To Learn More In Person Events IFRS Briefings with PwC and Oracle: http://www.meetpwc.com/IFRSNorCal Webcasts Upcoming PwC-Oracle IFRS webcasts (Dec 2008 - March 2009) : www.meetpwc.com/OracleIFRS Whitepapers Preparing US Companies for the Transition to IFRS Managing the Transition to IFRS 35

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