Tuesday, August 20th, 2019 

Internal Controls / Data Warehouse Solutions

Effective Internal Controls “... One of the most significant contributions of computers is the ability to prevent errors from entering the system, as well as detecting and correcting errors once they are present.”

Good decisions begin with reliable, secure, timely and consistent information. Quality data has always been a goal of the financial reporting and management reporting processes.

When all the data was on a mainframe, many of the controls were not visible to the user. With widespread reliance on information systems, ranging from mainframe to client/server, to desktop computer environments, and multiple data sources, controls are needed over significant processes. In evaluating control, two broad groupings of information systems control activities can be used. The first is general controls, which includes controls over information technology management, information technology infrastructure, security management and software acquisition, development and maintenance. General controls apply to all application systems and help ensure their continued, proper operation. The second is application controls, which are designed to ensure completeness, accuracy, authorization, and validity of data capture and processing.

Recent laws and regulations, such as The Sarbanes-Oxley Act, The USA Patriot Act, The Health Insurance Portability and Accounting Act, and The Gramm-Leach-Bliley Act have raised the bar of internal controls over data and data processing. There is a need to identify, evaluate, and document the effectiveness of the controls related to information technology. If your controls do not lower the risk of an error, are you using the correct platform?

New laws, regulations, and technology make it an opportune time to review the applications which provide important input to your financial statements and related footnotes. Have you taken an inventory of spreadsheets, Excel or Lotus files, used in the financial reporting process? By design and operation, a dependence on spreadsheets subjects an entity to a high risk that the financials are unreliable. Other general and application control review areas generally identify other areas of unwarranted reliance.

A data warehouse is a viable alternative which can be designed to improve your internal controls while generating improved, timelier financial information. New technology allows customized and robust data warehouses to be built at a reasonable cost for all sizes of insurance companies. The warehouse can be customized to your need for size, scalability, location and structure of data, and multiple users, while having the security and ease of maintenance of a mainframe system.

HRMSI has the experience and expertise to assist you in an affordable data warehouse solution to meet the growing needs of your business. Please contact us at (630) 243-0117 or MFischer@riskinc.net.

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