FINANCIAL CLOSE PROCESS CONTROLS QUESTIONNAIRE

WHAT ARE FINANCIAL CLOSE PROCESS CONTROLS?

The financial close process is important to a company, as it is the function directly related to producing company financial results for each period end.
Restricting access to accounting and reporting applications and establishing clear write-off and reserve policies are examples of financial close process
controls. These controls can be preventive or detective in nature.

WHAT IS THE OBJECTIVE OF FINANCIAL CLOSE PROCESS CONTROLS?

The objective of financial close process controls is to mitigate risks related reporting company financial results for a specific period of time.

Specific
Describe the
Activities, Type of
Basis for
Does Programs Deficiency Management
Point of Controls Controls Effectiveness
Business This or Controls Test Deficiencies (Efficiency, Action Plan
# Focus/Control Properly Operating Conclusion
Activity Control in Place Procedures Noted Fin. to Address
Objective Designed? Effectively? (Including
Exist? That Satisfy Reporting, Deficiencies
Evidence of
the Compliance)
Operation)
Objective

Accounting
policies exist,
are kept current,
Financial and are
1
Close communicated
to the
appropriate
personnel.

Procedures are
in place to
ensure that all
Financial
2 transactions are
Close
recorded in
accordance with
GAAP.

1 Source: www.knowledgeleader.com
 Specific
Describe the
Activities, Type of
Basis for
Does Programs Deficiency Management
Point of Controls Controls Effectiveness
Business This or Controls Test Deficiencies (Efficiency, Action Plan
# Focus/Control Properly Operating Conclusion
Activity Control in Place Procedures Noted Fin. to Address
Objective Designed? Effectively? (Including
Exist? That Satisfy Reporting, Deficiencies
Evidence of
the Compliance)
Operation)
Objective

Close
procedures,
including due
dates,
responsibilities,
disclosure
Financial
3 updates and
Close
account
classifications,
are defined,
communicated
and
implemented.

The standard
Financial corporate
4
Close reporting format
is utilized.

Access to
accounting and
reporting
Financial
5 applications is
Close
limited to the
appropriate
individuals.

Journal entry
Financial input is restricted
6
Close to authorized
personnel.

There is a
Financial checklist of the
7 standard closing
Close
journal entries
made at month-

2 Source: www.knowledgeleader.com
 Specific
Describe the
Activities, Type of
Basis for
Does Programs Deficiency Management
Point of Controls Controls Effectiveness
Business This or Controls Test Deficiencies (Efficiency, Action Plan
# Focus/Control Properly Operating Conclusion
Activity Control in Place Procedures Noted Fin. to Address
Objective Designed? Effectively? (Including
Exist? That Satisfy Reporting, Deficiencies
Evidence of
the Compliance)
Operation)
Objective
end, quarter-end
and year-end.

Pre-numbered
vouchers are
used to ensure
Financial that all non-
8
Close recurring entries
are processed
only once in the
system.

Manual journal
entries have
adequate
supporting
Financial
9 documentation
Close
and are
approved by the
appropriate level
of management.

Standardized
journal entries
Financial
10 are used for
Close
recurring journal
entries.

All non-recurring
entries are
supported by
Financial adequate
11 documentation,
Close
reviewed before
approval and the
appropriate
management is

3 Source: www.knowledgeleader.com
 Specific
Describe the
Activities, Type of
Basis for
Does Programs Deficiency Management
Point of Controls Controls Effectiveness
Business This or Controls Test Deficiencies (Efficiency, Action Plan
# Focus/Control Properly Operating Conclusion
Activity Control in Place Procedures Noted Fin. to Address
Objective Designed? Effectively? (Including
Exist? That Satisfy Reporting, Deficiencies
Evidence of
the Compliance)
Operation)
Objective
required to
approve these
entries.

Journal entries
are supported
Financial
12 and authorized
Close
before being
posted.

Appropriate
management is
required to
Financial
13 approve
Close
significant or
unusual journal
entries.

System logic
prevents journal
Financial
14 entries for which
Close
debits do not
equal credits.

The system will

not allow journal
entries to be
Financial
15 recorded to a
Close
closed
accounting
period.

System logic will

Financial not allow
16
Close duplicate journal
entry numbers.

4 Source: www.knowledgeleader.com
 Specific
Describe the
Activities, Type of
Basis for
Does Programs Deficiency Management
Point of Controls Controls Effectiveness
Business This or Controls Test Deficiencies (Efficiency, Action Plan
# Focus/Control Properly Operating Conclusion
Activity Control in Place Procedures Noted Fin. to Address
Objective Designed? Effectively? (Including
Exist? That Satisfy Reporting, Deficiencies
Evidence of
the Compliance)
Operation)
Objective

A procedure
detailing the
calculation of
Financial specific accruals
17
Close and recording
rules exists and
is consistently
applied.

Write-offs and
reserves are
clearly defined,
Financial consistently
18
Close applied, and
monitored in
accordance with
company policy.

All account
balances are
reconciled prior
to closing the
books, including
confirming that
Financial
19 balances agree
Close
with related
parties (including
reconciling
subsidiary
balances to GL
balances).

Significant
Financial variances in
20
Close reconciliations
are investigated

5 Source: www.knowledgeleader.com
 Specific
Describe the
Activities, Type of
Basis for
Does Programs Deficiency Management
Point of Controls Controls Effectiveness
Business This or Controls Test Deficiencies (Efficiency, Action Plan
# Focus/Control Properly Operating Conclusion
Activity Control in Place Procedures Noted Fin. to Address
Objective Designed? Effectively? (Including
Exist? That Satisfy Reporting, Deficiencies
Evidence of
the Compliance)
Operation)
Objective
and resolved
timely.

Fluctuation
analysis of
Financial
21 actual-to-budget
Close
or prior periods
is performed.

The financial
reporting
package is
reviewed by
management
before
submission to
Financial
22 corporate (the
Close
financial
statements, or
sections thereof,
are reviewed by
someone
independent of
the preparer).

Duties are
appropriately
Financial
23 segregated in
Close
the closing
process.

Access/authoriz
Financial ation controls
24 are in place to
Close
maintain the
integrity of the

6 Source: www.knowledgeleader.com
 Specific
Describe the
Activities, Type of
Basis for
Does Programs Deficiency Management
Point of Controls Controls Effectiveness
Business This or Controls Test Deficiencies (Efficiency, Action Plan
# Focus/Control Properly Operating Conclusion
Activity Control in Place Procedures Noted Fin. to Address
Objective Designed? Effectively? (Including
Exist? That Satisfy Reporting, Deficiencies
Evidence of
the Compliance)
Operation)
Objective
chart of
accounts.

A procedure is in
place to identify
and
communicate
transactions/eve
nts that have
Financial
25 significant
Close
financial
accounting
and/or reporting
implications to
the accounting
department.

All of the critical

financial data is
captured as
close as
possible to the
source,
Financial accurately
26
Close processed and
reported on a
timely basis for
analysis,
evaluation, and
use in financial
reporting.

There are
adequate
Financial controls over
27
Close processing
programs and
transaction files.

7 Source: www.knowledgeleader.com
 Specific
Describe the
Activities, Type of
Basis for
Does Programs Deficiency Management
Point of Controls Controls Effectiveness
Business This or Controls Test Deficiencies (Efficiency, Action Plan
# Focus/Control Properly Operating Conclusion
Activity Control in Place Procedures Noted Fin. to Address
Objective Designed? Effectively? (Including
Exist? That Satisfy Reporting, Deficiencies
Evidence of
the Compliance)
Operation)
Objective

Policies and
procedures are
Financial
28 in place for all
Close
critical
processes.

There is ongoing
monitoring in the
normal course of
operations by
managers and
Financial
29 process owners
Close
to assess the
effectiveness of
the financial
reporting
process.

8 Source: www.knowledgeleader.com