The Financial Shared Service Center mode as a new form of allocation of financial resources group, can significantly reduce the operating costs of finance, realize centralized management and reduce internal compliance risk, optimize the process to improve the efficiency of the strategy, but this new financial resource allocation mode of the group company also brings certain risk. The author intends to combine the A group company financial sharing on risk identification, risk assessment, risk response link service center case to analyze, in order to have established or hope to establish financial shared service center group in the construction of risk management consciousness, risk prevention process, can have certain reference significance.
Financial Shared Service Center to subvert the traditional financial accounting work, not only brought the transformation of financial personnel’s role of financial processes and processing efficiency has also brought a qualitative change, financial shared services will enable the implementation of enterprise strategy and enterprise financial, business and financial integration for enterprise groups to provide more refined the real-time information sharing related, so as to provide the basis for sustainable value creation. However, Financial Shared Service Center in the work environment, the accounting process, information system, communication mode, financial personnel occupation orientation, financial work performance evaluation than the traditional financial accounting have obvious changes, with its unique risk.
Risk of Financial Shared Service Center
The A group in the preparation of Financial Shared Service Center in the process of taking risks in advance to be identified, A group using a variety of risk identification methods in different aspects, such as questionnaire, brainstorming, expert consultation, management interview, and mandala table (see Figure 1) is a method of comparison system among them, it includes the Financial Shared Service Center is facing a variety of risks, and presents the logic between the various risks related to each other.
Figure 1 Mandala table analysis financial shared service center is facing the risk of
(1) financial personnel make centralized financial accounting work site and the financial management of the object location separation, so that the company assets supervision, asset security risk, may affect the group company strategic target.
(2) the financial work division will help group companies to reduce costs, but each person engaged in a very small part of the entire financial process, which will make the accounting mechanization, financial personnel increased pressure, working enthusiasm is reduced, easy to form a wrong thinking formulary, the increased risk may lead to the quality of the financial report reduce.
(3) the volume of business financial remuneration and treatment often linked, so the financial personnel for handling the business only focus on whether the process of the provisions in the form, and the substantial contents of the business to focus on economic matters, the authenticity of the lack of review, lack of necessary supervision on business moral risk and legal risk.
(4) the financial staff in handling the business documents, to judge whether the process, if it is directly in the financial system in the form of documents, no review of documents, may lead to financial reporting quality.
(5) Financial Shared Service itself needs to rely on information technology, in order to attrition under the condition of high quality and efficient completion of the accounting work. On the one hand, the Financial Shared Service Center can improve the efficiency, and the security of the financial information and financial data on the other side depends on the security and stability of the information system.
(6) legal risk and opportunity loss. Finance Shared Service Center in the area covered by the various countries and regions vary in laws and regulations and tax policies, which will cause the service center to take care of the specific circumstances of individual countries in business process, especially the laws and regulations of the country where the service center. Financial Shared Service Center staff on the local government to give policy support to the lack of understanding of the enterprise, it is possible to lose the opportunity to get government support.
(7) because of the language barrier, A group of overseas affiliates of financial outsourcing, and because of the existence of the contractor causes different objectives and cultural differences, poor communication, A group company in order to get high quality of accounting work need to pay a high cost.
(8) because of the high rate of liquidity of financial contractors, the quality of their personnel is not known to the A group, and the business secrets of A group are at risk of leakage.
Two, risk analysis of Financial Shared Service Center
(a) risk classification
A group’s risk management committee is well aware that the qualitative and quantitative analysis of the risk of a Financial Shared Service Center is based on the objectives of risk management. In September 1992, the United States COSO Committee issued the internal control — integrated framework (COSO-IC), September 2004, the United States COSO Committee according to the relevant requirements of Sarbanes Oxley Act, promulgated the enterprise risk management — integrated framework (COSO-ERM), COSO-ERM is based on COSO-IC extended here, it puts forward four major goals that is, from three angles: strategic objectives, operational goals, objectives, follow the target report.
The risks associated with the Financial Shared Service Centre will have an impact on the achievement of these objectives. A Group Financial Shared Service Center will be divided into two categories and the risk of the following aspects (see Figure seven) (see Figure 2).
Figure 2 the risk of Financial Sharing Center
(two) risk assessment
A group’s risk mapping risk map in figure 2. Risk assessment diagram to identify a risk will have a significant impact on the A group, and the conclusion and the possibility of risk linked to determine the A Group Company Financial Shared Service Center provides a framework for risk priorities (see Figure 3).
Figure 3 the risk of Financial Sharing Center
Three, the risk management measures of Financial Shared Service Center
COSO-ERM COSO-IC in the five elements of internal control based on the elements of enterprise risk management is divided into eight, namely, the internal environment, goal setting, event identification, risk assessment, risk response, control activities, information and communication, monitoring, and that the eight interrelated elements of risk management and restrict each other throughout the enterprise the risk management process.
A control group COSO risk management framework of the risk management of the eight factors, for the company’s financial risk sharing matters service center, according to the two step approach to prevent the risk of possible financial shared service center.
The first step: sort out the financial matters related to the risk management process, find loopholes, formulate corresponding preventive measures.
(1) the risk of financial reporting is mainly from the quality of accounting records, so the establishment of a clear financial audit system to ensure that the accounting records of the true, accurate, complete, timely. In accordance with the principle of universal coverage and focus on monitoring the establishment of three cross type financial audit system, as shown in figure 4.
Three level cross type financial audit system
(2) to prevent the loss of assets of the group company. Financial Shared Service Center for the prevention of current assets in the bank account to pay attention to the examination and approval, other receivables, such as deposits and other high-risk business. A group to take online banking payment, in accordance with the size of the size of the approval authority set, more than a certain amount on the need for approval. Check with other stakeholders to ensure the safety of the assets. For inventory, fixed assets, the implementation of a periodic inventory system, can not be far away from business units on the negligence of this work.
(3) information security risk control. Financial Shared Service Center is built on the basis of modern electronic information technology, all business records will be recorded in the enterprise resource management system. So A company established a strong IT team to ensure the normal operation of the system, including the safe operation and maintenance of hardware team, including service in the enterprise resource management system of the team, for the purchase of the third party software, but also keep close contact with suppliers.
(4) prevention of moral hazard. The Financial Shared Service Center staff to contact the business data is written or electronic information, the authenticity of the business itself, the lack of time verified one by one, so the A group of moral education for employees very seriously, especially for the new employee’s previous reimbursement, payment and other business applications is one by one to spend time with the audit in order to ensure that new employees are fully familiar with the provisions of the financial system and the establishment of the company, employees of credit records, false expenses, false invoices issued by the staff to conduct interviews and inform the supervisor.
(5) to guard against the risk of policy. The staff of the Financial Shared Services Centre is far from the business unit of the service and is not aware of the local government’s policy of giving the enterprise. Therefore, the service center and the local accounting firm and the tax office established a link of financial sharing, they commissioned the new policy of the local government to inform the A group company’s Financial Shared Service Center on contact. The Financial Shared Service Center in the relevant contact person to know in advance group may take place is different from the new business consulting firm before local contacts, in order to get the relevant policy information, so as to help A company to obtain government policy support or avoid punishment after.
(6) to guard against legal risks. 2013 GSK commercial bribery case, the case was China public security department investigation, in the investigation of the case, GlaxoSmithKline Chinese shared service center director of Finance said: the book seems to meet the requirements, so it can not see the problem. To prevent such risks, the first person in charge of Financial Shared Service Center to have a clear understanding of the personal interests, the interests of the Department, or even a region of interest must obey the A group headquarters interests, resolutely resist trading behavior from all aspects of compliance illegal substance surface. Secondly, it is very important to treat the behavior of large payment, especially for the payment of the nature of service. For such payment, according to the level of risk assessment risk level of approval authority set up, even the small amount, but a higher risk of payment behavior, strict requirements of high-level personnel authorized, necessary for forensic Department pre-approval. Finally, do a good job of data mining, the financial data in accordance with the classification and comparison of business content changes, the relevant data to do a logical review. For example, a large amount of foreign conference payment, is bound to accompany the same period of the people’s air ticket spending.
(7) to guard against tax risks. A group’s Financial Shared Services Center at S headquarters, to provide financial services to various business units. In China, the tax authorities of the affiliated company headquarters to the charges of the subsidiary is very sensitive, it is likely to be the local tax authorities in accordance with the headquarters management fee treatment, and does not allow subsidiaries in the forefront of enterprise income tax. In order to guard against such risks, the A group headquarters and subsidiary service level agreements, provisions of charges, fees, and the local tax organ prior to contact with the subsidiary company, listen to their opinions, as the risk of tax adjustment to prevent tax day after check.
The second step: the establishment of long-term working mechanism to effectively control the risk of Financial Shared Service center. The establishment of the audit record sheet and the completion of the audit work into the performance appraisal management model. At any time to collect all kinds of problems found in the daily work, form a list of high risk of financial department, the rectification of the handling of the issue follow up, ensure that a solution to a, and then added and key control point and improve the audit responsibility auditing system, the formation of long-term mechanism to ensure that the problem has been completely solved.
Four, the conclusion
In this paper, A group company as an example to study the risk faced by the Financial Shared Service center. As a new financial management mode of Financial Shared Service Center, which is characterized in that the financial accounting standard, financial data, business processes, data processing information, for these new characteristics of group company according to the eight elements of the COSO risk management framework on Risk Management: the internal environment, goal setting, event identification, risk assessment, risk response, control activities, information and communication and supervision, to re-examine the risk. A group of risks identified by the Department of the mandala, risk assessment for risk assessment, and finally control the COSO risk management framework and puts forward some concrete measures to deal with the risk.
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