Internal Audit Solutions

Real Estate Analysis: Global Chemical Manufacturer

A large chemical multinational required an in depth analysis of its real estate holdings to generate greater return on its investments. The real estate holdings were spread across various geographies and were of various classifications including owned & used, leased, rented etc.

Relevante’s professionals did an in-depth analysis for the equitable valuation of the properties using various parameters like comparable property values, rents, maintenance costs, depreciation etc.

The analysis gave the management options and opportunities to buy/sell real estate or to re negotiate lease terms. The analysis helped the management of the company to effectively use its real estate investments for generating greater revenues and thereby greater profits.

Construction Audit: Ivy League University

A fortune 500 chemicals company was selling a $300 million segment of its business to a European company and, as part of the sale, had agreed to perform interim financial reporting and accounting services for the buyer during the extended transition period. The buyer was planning to port all financial and operational data for the purchased business segment to its own SAP system at the end of the four month transitions period and all required data would have to be “carved out” from the selling company’s system. The selling company had never performed these types of services before and realized that the task would be very time consuming with many unforeseen issues. It was decided that experienced outside financial services support would be necessary to fulfill the agreement.

A Relevante professional with this type of divestiture and “carve-out” experience was called in to help. Expectations included coordinating and monitoring the efforts of a large team of internal client accounting professionals to ensure that day to day accounting transactions continued to be recorded properly for the segment. Relevante professional services also included preparation and issuance of monthly consolidated financial statements for the segment on schedule and as required by the buyer. Day to day accounting and analysis was performed via the client’s SAP R/3 enterprise accounting system. Monthly consolidated financial reporting required utilization of Hyperion Enterprise. Throughout the transition period, additional unusual issues were addressed, investigated, and resolved to assure a smooth transition for the buyer.

At the end of the transition period, the buyer experienced a smooth transition and successfully ported all required information to its own SAP system. All significant issues were resolved timely and to the satisfaction of both the buyer and selling company.

Sarbanes Oxley Compliance – Global Insurance Company

A publicly traded Global Insurance Company required assistance with its Sarbanes Oxley compliance obligations. They needed help in documenting and testing the internal controls of the Bank.

Relevante provided a professional who led the preparation, review, testing, and documentation of the internal controls in compliance with the requirements as mandated by Sarbanes-Oxley Legislation. Our consultant effectively met the client’s needs of these regulations while satisfying mandates from the company’s audit committee and with the external auditors. Relevante’s consultant developed the frame work tool to assist the Bank with future testing of its identified Key Controls.

Sarbanes Oxley Compliance – Global Chemical Manufacturer

A multinational chemical giant required assistance with its Sarbanes Oxley compliance. The assignment involved implement procedures to achieve auditable results in conjunction with Sarbanes-Oxley Section 404 Compliance.

Relevante’s professionals were involved in the review, preparation and documentation of the internal control templates and monthly account reconciliations for successful implementation of the control processes to be in line with the requirements as mandated by the Sarbanes-Oxley legislation.

Relevante’s professionals were involved with instructing and coordinating with the plant accounting staff and other functional groups, the ongoing procedures and monthly duties required to fully implementing Sarbanes-Oxley regulations.

Sarbanes Oxley Compliance – Global Abrasives Manufacturer

A large global abrasives manufacturer required assistance with its Sarbanes Oxley compliance efforts for all its plants in the Gulf Coast Region. The company required assistance with improvement of its internal control structure and put processes in place to monitor its compliance.
Relevante’s professionals were involved in assisting the SOX control activity owners of the company owners write up their control activities, identify their supporting evidence, and plan out audit activities to prove their compliance with the SOX regulations.

Relevante’s professionals were also involved in bringing in greater controls in areas where controls were found to be weak as well as testing the processes to ensure that the controls were effectively in place.

A monitoring process was also put in place by Relevante’s professionals for effective compliance review in future.

Sarbanes Oxley Compliance – Global Adhesives Manufacturer

A large global adhesives manufacturer needed assistance with its Sarbanes Oxley compliance for its plant in Illinois, USA. The project required Relevante’s professionals to identify inefficiencies in the current procedures, document the same & recommend remedial procedures so as to be compliant with the Sarbanes Oxley regulations.

Relevante’s professionals needed to identify the work roles of each individual so as to be in concurrence with the work roles assigned to them in enterprise resource package system that the client was using. The analysis of the individual work roles provided various control inefficiencies to the Relevante team, which was highlighted to the plant management as well as the corporate management of the company.

Once the work roles of each individual were tied to the system roles, the Relevante team was again at hand to ensure compliance by conducting a review audit after the system stabilized.

Sarbanes Oxley Compliance – Global Packaging Manufacturer

A leading global packaging manufaturer was involved with the process of complying with the provisions of the Sarbanes Oxley Act. The compliance process required additional external resources so as to complete the process before the due date.

As an independent consulting firm, Relevante’s professionals were ideally positioned to assist the client in its SOX compliance efforts. Relevante’s professionals were involved with examining the various accounting functions to help the company with documentation of existing internal control processes in place.

Relevante’s professionals were also involved in bringing in greater controls in areas where controls were found to be weak as well as testing the processes to ensure that the controls were effectively in place.

A monitoring process was also put in place by Relevante’s professionals for effective compliance review in future

Sarbanes Oxley Compliance – Global Construction Materials Manufacturer

A large global construction materials manufacturer required a SOX remediation task force which would work with and provide guidance to the finance controllers at various sites both nationally & internationally.

Relevante’s professionals traveled to the organization’s sites both nationally & internationally to be part of the SOX team. Relevante’s professionals were involved in developing best practices for Fixed Assets & Inventory procedures followed by the company which ensured that the company established an adequate control structure so as to comply with the Sarbanes Oxley regulations.

Relevante’s professionals were also actively involved with discussions with the external auditors and plant accounting personnel so as to give them the required confidence with regard to the company’s internal control environment.

Sarbanes Oxley Compliance – Publicly Traded Food Manufacturer

A publicly traded food manufacturer was embarking on becoming compliant with Section 404 of the Sarbanes-Oxley Act of 2002. They needed help in documenting and testing the internal controls of a European subsidiary. They received bids from Big 4 firms and were looking for less expensive alternatives.

Relevante provided consultants whom the client felt were of equal quality to those offered by the Big 4 but at almost half the price. The professionals were fluent in the native language of the subsidiary host country and had significant experience performing IT audits, documenting and testing internal controls and interfacing with external audit teams.

Our consultants effectively assisted the client with meeting the needs of these new regulations while satisfying mandates from the company’s audit committee and demonstrating compliance to the external auditors.

Sarbanes Oxley Compliance – Fortune 500 Chemical Company

An important strategic business unit of a Fortune 500 chemical company was confronted with the task of analyzing, improving & documenting its policies & procedures with regard to tracking & recording of its fixed assets numbering close to 100,000 units. The business unit had to make significant improvements to its policies & procedures with respect to its fixed asset movement types as well as use a better system to track and record all the fixed assets as they faced a lot of database issues which hampered the effective monitoring of the fixed assets.

Relevante’s professionals collaborated with the client’s internal team to create policies, enhance the effectiveness of the tracking mechanism & document the entire procedure in a completely new policy & procedure manual. They also kept in mind FASB/GAAP guidances while executing the assignment while also coordinating with various user groups like plant IT & plant finance. Relevante’s professionals also designed the various templates to capture information so as to ensure compliance with the Sarbanes Oxley legislation. They also analyzed various fixed asset systems and recommended a new & comprehensive fixed asset monitoring system to the client which was implemented within the strategic business unit. The internal controls with regard to fixed assets have been greatly strengthened and the client has moved closer to complying with the Sarbanes Oxley legislation.

Sarbanes Oxley Compliance – Global Chemical Manufacturer

A large chemical manufacturer required assistance with its Sarbanes Oxley Compliance efforts for all of their subsidiaries. The project required an inter-company reconciliation audit of all inter-company relationships including accounts such as Trade and Service transactions, Royalty, mark-up Expense/Income, Shares Expense and Loan Interest. The company required assistance of Relevante to implement an internal control structure and to put processes in place to monitor the compliance.

Each region of relationships was handled by a different professional and there were 265 reconciliations to be audited.

Over time the process was automated and enabled consultants to track and compare the data more effectively. Weekly reports were given to management to track our efficiency and progress of the project.

Sarbanes Oxley Compliance – Fortune 500 Utility Company

A large chemical manufacturer required assistance with its Sarbanes Oxley Compliance efforts for all of their subsidiaries. The project required an inter-company reconciliation audit of all inter-company relationships including accounts such as Trade and Service transactions, Royalty, mark-up Expense/Income, Shares Expense and Loan Interest. The company required assistance of Relevante to implement an internal control structure and to put processes in place to monitor the compliance.

Each region of relationships was handled by a different professional and there were 265 reconciliations to be audited.

Over time the process was automated and enabled consultants to track and compare the data more effectively. Weekly reports were given to management to track our efficiency and progress of the project.

Sarbanes Oxley Compliance – Fortune 500 Health Insurance Company

A large chemical manufacturer required assistance with its Sarbanes Oxley Compliance efforts for all of their subsidiaries. The project required an inter-company reconciliation audit of all inter-company relationships including accounts such as Trade and Service transactions, Royalty, mark-up Expense/Income, Shares Expense and Loan Interest. The company required assistance of Relevante to implement an internal control structure and to put processes in place to monitor the compliance.

Each region of relationships was handled by a different professional and there were 265 reconciliations to be audited.

Over time the process was automated and enabled consultants to track and compare the data more effectively. Weekly reports were given to management to track our efficiency and progress of the project.

Sarbanes Oxley Compliance: Publicly Traded Gaming & Entertainment Company

A large chemical manufacturer required assistance with its Sarbanes Oxley Compliance efforts for all of their subsidiaries. The project required an inter-company reconciliation audit of all inter-company relationships including accounts such as Trade and Service transactions, Royalty, mark-up Expense/Income, Shares Expense and Loan Interest. The company required assistance of Relevante to implement an internal control structure and to put processes in place to monitor the compliance.

Each region of relationships was handled by a different professional and there were 265 reconciliations to be audited.

Over time the process was automated and enabled consultants to track and compare the data more effectively. Weekly reports were given to management to track our efficiency and progress of the project.

Sarbanes Oxley Compliance – Major Regional Bank

A Major Regional Bank engaged several Relevante consultants to perform procedural reviews and testing on numerous internal control processes established upon a COSO framework. This 72 branch Bank required such on over 70 internal control cycles as part of its Sarbanes-Oxley (“SOX”) Section 404 compliance. Our professionals additionally completed numerous FDICA regulatory, and SOX 302 compliance reviews using a synergistic audit program approach.

Our consultants recommended improvements to the Bank’s internal control processes where needed and their contributions were critical in enabling the Bank to document effective internal control cycles, and meet the Bank’s deadlines for SOX and FDICA compliance.

Operational Audit – International Not-For-Profit Association

A large, membership driven, Not-For-Profit Association requested a Relevante professional to review the 2004 cash distributions of its European operations located in Switzerland. Our performances soon lead to an extensive operational and internal control review of the overall European operations – through this professional. The Relevante professional traveled to the Swiss branch, which resulted in a comprehensive report for the Association’s Executive Director, identifying operational and internal control weaknesses, along with recommended remedial actions for the European operations.

Inter-company Reconciliations for SOX Compliance – Global Chemical Manufacturer

A large chemical manufacturer required assistance with its Sarbanes Oxley Compliance efforts for all of their subsidiaries. The project required an audit of all inter-company relationships including reconciliation of inter-company accounts capturing trade and service transactions, royalties earned, mark-ups of expense/income, shares expense and loan interest.

Each region of relationships was handled by a different professional and there were 265 reconciliations audited. The Relevante consultant undertook the largest problem reconciliation totaling a variance of $20,000,000. This amount was reduced to $200 by the end of the project.

The Relevante consultant was additionally integral in implementing an internal control structure and in developing processes to monitor the compliance. Weekly reports were given to management to track the efficiency and progress of the project. Conclusively, the control process was automated and enabled the client/consultants to then effectively and efficiently track and review the inter-company relationships and activities.

Alignment of Enterprise Risk Management with Regulatory Compliance efforts – Large Pharmaceutical Company

Aligned enterprise risk management documentation and testing processes for the company’s information technology internal controls.

Business Challenge:
A large pharmaceutical company established an initiative to fully comply with Sarbanes-Oxley (SOX) regulations for year ending 2004. The company completed this initiative within the desired timeframe. However, during subsequent years, they needed to align their enterprise risk management plan for their internal compliance function that served multiple regulatory authorities. This enterprise risk management initiative considered leveraging the overlapping regulatory compliance efforts and needed to remain flexible to focus the annual audit plan on the control areas of high risk.

Relevante Solution:
Relevante assisted with revising the enterprise risks plan for compliance with SOX and the FDA. We interviewed process owners, revised documented processes, identified and aligned key controls from multiple regulatory authorities, and reported to management on our findings. Our CobiT-based control evaluation approach provided management with a scorecard by control area of their risk universe, critical areas, and control points as well as a risk mitigation summary, gap listing, and remediation plan. We also helped inform personnel of the important aspects of complying with regulatory authorities.

We revised the enterprise risk management plan, related work papers, and we have been asked to continue to work closely with the internal and external auditors on evolving compliance issues, new process documentation, and testing results.

Value Delivered:
The Pharmaceutical major, with Relevante’s assistance, aligned their enterprise risk management with best practices with respect to SOX and FDA compliance. The company’s internal controls were compliant and streamlined for year ending 2006.

Our phased approach to compliance ensured participation from the company’s management and coordination with external auditors during each step so that deliverables were on time and on target, and costs were minimized. By educating the process owners about regulatory compliance and internal controls, we were able to ensure complete cooperation and a smooth and successful compliance project. The company was extremely satisfied with the value we added during this engagement, that we are now working with them on a number of other compliance related projects, including ongoing testing of internal controls.