Skip to content

ACCA Strategic Professional · Strategic Business Leader · Internal control and management reporting

At Orvane Retail, regional managers compile their own sales figures in spreadsheets and email them to head office, where they are merged manually. The CFO notes that regional totals have repeatedly disagreed with the general ledger, and the board has twice received revised reports. The CFO wants a solution that tackles the root cause while supporting timely reporting. Which is MOST appropriate?

An integrated system using a single data source with automated ledger reconciliation and access controls is most appropriate. It removes manual merging and inconsistent spreadsheets, improving accuracy and timeliness. Merely asking for more checking leaves the weak process in place, and audit preparing reports would impair independence.

  1. AAsk regional managers to double-check their spreadsheets before sending
  2. BImplement an integrated reporting system drawing from a single source of data, with automated reconciliation to the ledger and access controlsCorrect
  3. CReduce reporting to quarterly so there is more time to correct errors
  4. DHave internal audit prepare the board report instead of finance

Explanation

The root cause is fragmented, manual, uncontrolled data handling leading to inconsistency. A single source of truth with automated reconciliation and controls addresses accuracy and timeliness together. Asking for double-checks relies on the same weak process, quarterly reporting harms timeliness, and having internal audit prepare reports would compromise its independence.

Did you get it right without looking?

One question tells you little. A timed set on Internal control and management reporting shows your real accuracy, how long you take and where you lose marks.

Practise Internal control and management reportingFree diagnostic mock

More Internal control and management reporting questions