Perpetual rounds of mergers and acquisitions, organizational change and compliance have all taken their toll, leaving firms susceptible to fraud, inefficiencies, and mistakes. The greater the change, the greater the risk exposure, according to research commissioned by ACL Services.
Just under half the 54 UK, US, and German IT and telecoms companies surveyed said they had either been through a company or departmental merger or an acquisition.
“Even seemingly simple changes to business structures, such as the merger of a department or a move to a shared services center, can involve massive financial consolidation and upheaval. Constant change equals greater risk and businesses need to have much tighter systems and monitoring in place to manage both,” said Harald Will, president and CEO of ACL.
Almost half the respondents said they believed their financial systems had been undermined by business operational changes, and one in three felt they were exposed to regular finance department errors.
This poor risk management had left 5% of respondents out of pocket, while the patchy compliance controls of another 5% had led to fines from auditors.
Only one in 10 firms said they were using the continuous auditing and monitoring technology needed to tackle these risks, while the others relied instead on ad hoc analysis.
