Financial Reporting Control Matrix

Control Attributes
Cycle Reference Key Control Activity Potential Testing Procedures Account COSO Prevent/Detect FSA Frequency Man/Auto Fraud

Review documentation of segregation of duties review that

An annual segregation of duties and user access review is was performed. On a test basis, select employees from the list
performed on all significant systems and databases that relate and confirm their duties. Also, test completeness of document
to financial reporting (e.g ERP, consolidation software, fixed by selecting a sample of employees physically observed in
Financial assets, payroll, etc.). Documentation of this review is different functional areas and test if they were included in the
Reporting FR-01 maintained. review. Ensure all applicable systems have been reviewed.
A documented review of income statement line items,
including a budget to actual comparison, is performed on at Select a sample of income statement reviews performed.
least a quarterly basis to detect unexpected trends or Review notes, action plans and sign-offs related to the review
Financial deviations. Unusual items or trends are investigated and to ensure thoroughness. Investigate any issues that required
Reporting FR-02 required accounting adjustments are recorded. follow-up.

A documented review of balance sheet line items is performed

on at least a quarterly basis to detect unexpected trends or Select a sample of balance reviews performed. Review notes,
Financial deviations. Unusual items or trends are investigated and action plans and sign-offs related to the review to ensure
Reporting FR-03 required accounting adjustments are recorded. thoroughness. Investigate any issues that required follow-up.

Select a sample of monthly submissions from local facility.

Determine if reconciliation between local general ledger and
submitted data is performed by reviewing evidence. On a test
An monthly reconciliation is performed between data basis agree individual line items submitted to balances with
submitted from the local facility to the consolidations the local general ledger. Review for proper account
department (local general ledger reconciled to submitted classifications.
Financial data). Once a period is closed, items can no longer be posted
Reporting FR-04 without proper approval. Within the system, test if posting to prior periods is allowed.

Select a sample of significant accounts from the balance

Reconciliations of the local reporting unit general ledger are sheet and review their reconciliations. Ensure totals agree to
performed on a monthly basis for all significant accounts. The general ledger and reconciling items are properly supported
reconciliation process includes the timely clearing of and explained. Note any reconciling items that have been
Financial reconciling items as well as review by management. outstanding for several periods. Ensure reconciliation is
Reporting FR-05 Evidence of review is maintained. reviewed by an independent person.

Select a sample of manual journal entries. Trace entry

amounts to supporting documentation. Ensure each posting is
approved by an independent person and that amounts posted
are with their approved authority limit. Determine if approval
was given prior to item being posted.

Manual journal entries (i.e. entries not system generated or Determine how managment ensures all manual journal entries
posted automatically to the general ledger) have supporting are reviewed. Test if a report is created each period listing all
Financial documentation and are evidenced with approval by the manual journal entries and that this document is reviewed by
Reporting FR-06 appropriate level of management prior to posting. management.

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2008 All rights reserved
Financial Reporting Control Matrix
Control Attributes
Cycle Reference Key Control Activity Potential Testing Procedures Account COSO Prevent/Detect FSA Frequency Man/Auto Fraud

Select a sample of significant accrual accounts and review

their reconciliations. Ensure totals agree to the general ledger
All accruals, reserves and estimates are consistently and reconciling items are properly supported and explain.
Financial calculated, recorded, and properly reviewed in accordance Ensure calculations are in line with company policy. Ensure
Reporting FR-07 with Company policy. reconciliation is reviewed by an independent person.
Inter-company balances and transactions are recorded in the
general ledger in designated inter-company accounts. These
accounts are confirmed with the other party on a monthly Review inter-company balances and determine if amounts
Financial basis. Differences are resolved and accounts adjusted in a have been confirmed with the other party. Investigate
Reporting FR-08 timely manner. differences that have not been resolved timely.

Look for evidence of communication of significant events to

Each significant facility completes an internal represnetation the finance/accounting department. During other audit
letter to identify and communicate transactions/events that procedures be aware of such transactions and determine if
have significant financial accounting and/or reporting they were communicated through the proper channels in a
implications to finance/accounting as they arise. Examples of timely manner.
these matters may include financial guarantees, purchase
commitments, legal or other contingencies, environmental Determine if representation letters are signed off by proper
exposures, changes in revenue recognition terms/selling levels organization. Review to ensure all representation letters
Financial terms, leases, hedging/derivatives, potential asset were obtained and reviewed. Test a sample of letters to
Reporting FR-09 impairments, and off-balance sheet transactions. ensure any issues noted were properly accounted for.

A financial closing check list is used to ensure completeness

and accuracy over the closing process. The checklist includes
the identification and updating of internal and external
financial reporting requirements and deadlines; the
methodology, format, and frequency of required analyses; and Select a sample of closing check lists. Test if all items were
Financial the content of reporting packages from departments and signed off. Select a sample of steps on the checklist and trace
Reporting FR-10 subsidiaries. to resulting output.

Select a sample of significant prepaid/other asset/other liability

accounts and review their reconciliations. Ensure totals agree
Analysis is performed of all prepaid, other asset and other to the general ledger and reconciling items are properly
liability account balances quarterly. This analysis supported and explain. Ensure calculations are in line with
Financial substantiates the contents of ending accounting balances and company policy. Ensure reconciliation is reviewed by an
Reporting FR-11 supporting documentation is maintained. independent person.

Changes to chart of account master data are reviewed and

approved in accordance with documented procedures and
approved authorization schedules. An edit report of all master
data changes is reviewed on a monthly basis and evidence of Select a sample of customer master data edit reports and
review is maintained. Chart of account master data is determine if it has been reviewed. Select a sample of changes
Financial reviewed by management for accuracy and on-going listed and trace to supporting documentation. Determine if
Reporting FR-12 pertinence annually. documentation change was properly authorized.
Financial The chart of accounts does not include duplicate general Review the chart of accounts for any duplicate numbers.
Reporting FR-13 ledger account numbers Obtain appropriate explanations.
Select a sample of cash flow reviews performed. Review
notes, action plans and sign-offs related to the review to
Financial A documented analysis of cash flow activity is performed on a ensure thoroughness. Investigate any issues that required
Reporting FR-14 quarterly basis by management. follow-up.

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2008 All rights reserved
Financial Reporting Control Matrix
Control Attributes
Cycle Reference Key Control Activity Potential Testing Procedures Account COSO Prevent/Detect FSA Frequency Man/Auto Fraud
Investigate how the finance/accounting staff stays informed of
Financial Changes to GAAP are routinely monitored for impact to changes to GAAP and other accounting regulations.
Reporting FR-15 company reporting requirements. Document results.

Review for evidence of communication within the organization

of changes to accounting policies and procedures. Select a
Financial Changes in accounting policies and procedures are sample of new policies or procedures implemented and
Reporting FR-16 communicated in all necessary parties in a timely manner. determine if it was communicated appropriately.

A control is in place to identify all non-routine transactions (i.e.

(1) changes in legal entities and legal entity reorganizations,
(2) sales or acquisitions of reporting units, (3) book vs. tax
differences, etc.) processed during the quarter. Once
identified, appropriate information is obtained and maintained
to enable proper accounting treatment to be applied to the Look for evidence of communication of non-routine events to
transaction. Such accounting treatments are properly the finance/accounting department. During other audit
authorized by management and are recorded in the general procedures be aware of such transactions and determine if
Financial ledger at the approved amount in the proper accounting they were communicated through the proper channels in a
Reporting FR-17 period and evidence of authorization is retained. timely manner.
Select a sample of related-party transactions. Determine if
they were properly approved and recorded in accordance with
policy and in the proper period. Determine if a policy is in
Financial Related party transactions are identified, authorized and place regarding company compliance policy as it relates to
Reporting FR-18 accounted for the in appropriate accounting period. related party transactions.
Review inter-company consolidations process and determine
Financial All inter-company transactions and balances are appropriately if amounts were properly eliminated. Ensure a policy is in
Reporting FR-19 eliminated through the consolidations process. place for handling eliminations.
Review disclosure check lists used in preparing financial
Disclosure checklists and instructions are used in preparing statements and SEC filings. Ensure all items have been
Financial and reviewing all draft financial statement disclosures for signed off. Select a sample of items from the check list and
Reporting FR-20 completeness and consistency. trace to support.
Select a sample of footnote disclosures made in the
Financial All required financial statement disclosure reporting packages appropriate SEC filing (10Q/10K). Trace support for footnotes
Reporting FR-21 and analyses, are prepared in accordance with U.S. GAAP. to supporting documentation.
All transactions and/or events requiring financial statement Determine if a disclosure committee has been formed. Review
disclosure are identified and appropriate financial statement minutes of meetings. Select a sample of new disclosures and
Financial footnote disclosure are prepared, reviewed and approved determine adequacy of review and timeliness of
Reporting FR-22 when necessary. implementation.
Draft financial statements and related disclosures are
reviewed by the disclosure committee or other qualified Determine if process for releasing financial information to
Financial personnel in the format that is to be released to external external parties is documented. Review evidence of recent
Reporting FR-23 parties and regulatory agencies. publication to determine if appropriate approval was obtained.

Versions of draft financial statements are accurately tracked

Financial and feedback from a qualified review is appropriately Determine who is responsible for controlling draft copies of
Reporting FR-24 incorporated into the next version of the financial statement. financial reports. Review for approval of final draft.

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2008 All rights reserved
Financial Reporting Control Matrix
Control Attributes
Cycle Reference Key Control Activity Potential Testing Procedures Account COSO Prevent/Detect FSA Frequency Man/Auto Fraud

Management discusses with the board of directors, audit

committee (or other qualified resource) the material issues
regarding accounting principles and financial statement
presentation and disclosure. (e.g. key estimates and
judgments, significant non-routine transactions, etc). Final
approval from the board of directors, disclosure committee or
other qualified personnel is required prior to release of the Review minutes of audit committee minutes for review of
Financial financial statements to external parties or filing with regulatory material accounting principles. Select a sample of recent
Reporting FR-25 agencies. items and determine if they were discussed.

Final financial statements and related disclosures (in print and Determine who is responsible for controlling final review of
Financial electronic form) are reviewed to ensure they are free from financial statements after publishing/printing/electronic
Reporting FR-26 publishing, printing or electronic conversion errors. conversion. Test if evidence of this final review is maintained.

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2008 All rights reserved