Real-World GRC Convergence: Platform Considerations

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Financial Controls Requirements

Financial controls platforms improve corporate governance and facilitate cost-effective compliance with reporting regulations. Financial controls platforms should help organizations:

  • Complete a financial risk-based scoping exercise and prioritize key risks and controls that affect compliance with reporting regulations.
  • Create process, risk and control documentation in a central repository, allowing for analysis of entities, processes and IT systems.
  • Deploy design and operating-effectiveness assessments to control owners through an integrated survey engine to drive accountability and simplify the user experience.
  • Validate controls through independent testing and continuous monitoring, providing assurance about the control environment.
  • Facilitate disclosure certification of gaps and weaknesses through dashboards and reports that compile information based on internal analysis and testing of controls.

Integration of multiple governance, risk and compliance (GRC) disciplines on a single platform is a laudable goal, and the effort to achieve it by both vendors and their customer organizations is increasing. Notably, within the enterprise GRC (eGRC) space, integration occurs most often among the internal audit, financial controls and enterprise risk assurance functions. Conversely, the compliance function has been less inclined to integrate, due in part to the specific subject-matter expertise required for each of the compliance functions, which makes the broader risk and control sets documented by other groups less relevant to compliance teams.

Still, the Institute of Internal Auditors' (The IIA) position paper, "The Three Lines of Defense In Effective Risk Management and Control" (January 2013), offers valuable insight into why it makes sense to bring these functions together, at least on an aggregated level, even if subsets of information are contained in other source systems. According to the paper, convergence will enable the three lines (operational/business-line managers, risk and compliance functions, and internal audit) to coordinate activities, map assurance functions and perform independent validation.

But significant barriers to the comprehensive and successful integration of GRC technology across numerous groups remain. For example, many organizations continue to depend on multiple GRC technologies to fulfill different and specific departmental needs, and most organizations use different platforms for IT GRC and eGRC. Other obstacles include the lack of a unified GRC framework or a common language, the complexity of existing technologies, the lack of effective change management, and a lack of demonstrable return on investment (ROI).

Achieving convergence in the face of these obstacles requires technology capable of unifying an organization's policies, processes and infrastructure. In this slideshow, Protiviti has identified the key elements of a technology platform capable of doing so.

 

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