Assurance of Internal Controls over Financial Reporting
The global industrial group ABB has replaced the former manual processing of quarterly assurance letters for the attention of the group management and regulatory authorities with a standardized, fully digitalized and automated process. 1stQuad has developed a user-friendly web application with a sophisticated authorization concept based on the FAST-Framework. The solution simplifies compliance with governance and brings efficiency gains.
ABB Information Systems
ABB Ltd is a Swedish-Swiss power and automation technology group headquartered in Zurich, which was created in 1988 from the merger of the Swedish ASEA and the Swiss BBC. The group is active worldwide and employs about 147,000 people in 100 countries.
Listed companies must regularly report to the supervisory authorities on their compliance with all relevant rules, for example with regard to correct tax accounting and corruption-free business conduct. In a global group, the heads of the national companies first issue a Letter of Assurance vouching for compliance with governance, before the CEO of the entire group finally signs the final document.
At ABB, country operations receive an “Early Warning Questionnaire” before each quarterly report to report potential risks. The information is collected, analyzed, and qualified. The result in each case is a “Final Questionnaire”. Once any problems have been resolved, a Letter of Assurance can be issued. All these letters are then compiled for final acceptance – from the country and regional companies to the Corporate Executive Board. A total of around 10 days are available for this complex process.
Complex and time-critical
Traditionally, this process has been strongly influenced by manual steps: Data had to be exported and imported between different applications, information had to be compiled from a variety of Excel spreadsheets. Some Assurance Letters arrived digitally at headquarters, others were printed out and signed by hand. The path of the documents through the group is complex – both the legal and the organizational corporate structure determine the hierarchy.
Smart process digitization
1stQuad received the order to digitalize the process completely and to support it with a web application that can be used intuitively by all involved employees. The new application is called QuICC (Quarterly Internal Control Certification) and is based on 1stQuad’s FAST framework. The FAST framework enables an authorization concept that takes into account the high requirements and ensures that sensitive data can pass through the group structures in a secure and traceable manner.