Process Number Prepared By Date

Alpha Corporation Internal Audit 20XX

Process Name Region Reviewed By Page
GLR GLOBAL 1 of 6
At Corporate/ERP
START A
level PROCESS AND CONTRO LS OVERVIEW:
At QAD site level
Thi s procedure outlines requirements for the consoli dation of
Al pha Corporation s financial information and cov ers the
05 MDBMS reports are processes related to validation of consolidation and el imination,
At quarter-end, the run every 4 hours as as well as reconciliation of intercompany balances
regional controllers local entities Consolidation 01 Once the GL activities are
submit their continue to upload Accountant complete, the currency and
reporting package to their trial balances. reconciles balance consolidations are run. Corporate Internal R eporti ng prepares a high level Consolidation
and Reporting Calendar which highlights on a monthly basis t he
Corporate. sheet and income due dates & times for compl etion of signi fi cant milestones of
statement local the total company close and report ing process. Among these
accounts from ELC 211/212 dat es are t he Int erco cutoff, Interco processes run, Interco
Financial System 2 confirmation among t he sites, pre-consoli dation, and final
Deliverables are Interco balances to standard Then the complete consoli dation activities.
tracked on a must reconcile accounts in consolidated set of books is
monthly checklist within $100k. Financial System 1 closed and the TB, Pre-consoli dation activities are performed beginning on Work
that is posted on Statement of Operations Day -3 of close and conti nue until final consol idation on, or
Collaboration and BS are run in USD and about, Work Day 7. Each day during the cl ose cycle, as well as
final after the period is closed in QAD and ERP, a y ear-to-dat e
Software tied out..
act ivity extract file is generated and i mported to Fi nancial
Sy stem 1.. The fil e is then validated to ensure only legitimate
If interco balances chart of accounts segments are in the file. Once val idated the
Variances
do not reconcile dat a is exported into Financi al Syst em 2 for translation,
05 above $1,500?
within $100k, After the period is closed in consoli dation and eli minat ion. Elimi nation entries are
The checklist is No Yes QAD and ERP, an extract performed in Financial System 2 aut omat ically based upon
Corporate requests
reviewed for the local sites to file is generated and intercompany account property settings. Final consoli dation
completeness by the imported to Financial act ivities include manual elimination entries for Profi t in Ending
reconcile the
Inventory and FX differences on CPEC Int erest, as well as,
IR manager differences. System 1
Accounting Manager Accounting explains manual updates for historical USD translati on ov errides for
communicates variances above Investment in Affi liates, Common Stock, CTA and Non-
Controlli ng Interest Balance Sheet accounts.
variances above $1,500 in the Then integrity reports are
$1,500 to internal reconciliation run daily to ensure that all After consolidat ion is complete, various data i ntegrity and
As part of the Local sites record reporting manager. template. financial data is accurately intercompany matching report s are generated and posted on
monthly close, local entries to reconcile Yes being uploaded from Collaboration Soft ware (see ELCC 113). An emai l is sent to all
entities upload differences to within users when report s are available for viewing. O ut standing data
Financial System 1 to ERP integri ty issues and/or intercompany differences are
financial statements $100k to Financial System 2. communicated to owners throughout the cl ose cycle by Int ernal
into Financial Reporting. Any remai ni ng intercompany differences after final
System 1 01 consoli dation are investigated and resolved prior to the next
Accounting Manager close.
reviews and Site is notified immediately
Next in the Over approves of any integrity issues by Wit hi n the consolidat ion system ( Financial System 2) all entities
consolidation 100K? reconciliation. the Internal Reporting use a common chart of account s and accounting calendar.
process, Corporate Group.
performs the GLR01(key):
intercompany In the consol idation process, the fi nal corporate trial balance is
No reconciled to the supporting sy stems and reconcil iations of
eliminations in
End intercompany accounts are performed and reviewed.
Financial System 2. 01 Reconci ling it ems i dentified are properly accounted for on a
Final master report Final consolidation
activities include manual timel y basis and i n the appropriate accounting period.
is generated and
submitted to the eliminations entries for
GLR05(supporting):
A Next, the monthly reporting ending inventory profit and
internal reporting Closing checklists are created for all reporting entities. Persons
packages are prepared and FX differences and tax responsible for performing st eps in the closing process sign and
development team. ELC 208
distributed for Quarterly entries. dat e the closing checklists to validate that each step i n the
Financial Review meeting. process was performed; management performs an ov erall
review and sign off of the checkli sts.

- Manual Key Control - Manual Non- Key Control -Automated Key Control -Automated Non-Key Control - Key SGR - Non- Key SGR
 Process Number Prepared By Date
Alpha Corporation Internal Audit 20XX
Process Name Region Reviewed By Page
GLR GLOBAL 2 of 6

START A

07
08
(1) The system will not allow the same 09 PROCESS AND CONTRO LS OVERVIEW:
Initiator prepares entry to be recorded twice; (2) The
journal entry and During t he normal course of business, certain journal entries are
system will not allow an entry to be post ed directly to the General Ledger to record adjustments,
related supporting recorded in a different period (i.e., estimat es, accruals, and other financial data. Manual journal
documentation recording an April entry in June); (3) entries i ncl ude entries booked as Journal Entries, Reversal
record an entry that has been prepared Ent ries, Recurring, Mass Allocations, and Aut omat ic Data
Interchange (ADI).
and approved by the same person ( with
the exception of personnel who have the The journal entry process i s a control used to ensure proper
General Ledger Manager (US) or EMEA - recording of financial statement detail in t he GL an proper
segregat ion of duties regarding t he recording, review, and
General Ledger Journal Entry & Post – modification of ent ries.
Journal entry is Primary (EMEA) roles)
entered into ERP/ Sub-process: Manual Journal Entries via Automatic Dat a
ERP 2. Interchange (ADI): Thi s process i s consistent with t he standard
manual journal entry process but exi sts as a means to expedi te
uploading and recording of entri es into ERP. The process begi ns
09.2 the same way as a standard journal entry, however, t he ADI
All journal entries that are prepared and posted system captures the data of the journal entry from the Excel
by the same user are flagged via an email alert spreadsheet through an automati c upl oad. The initiator uploads
sent to Internal Audit the spreadsheet via ADI and creates a journal entry form. Once
(Note – this shouldn t be an IA function and not the entry is interfaced into ADI, the initiator notifies his/her
Initiator notifies the manager that t he entry i s ready for review and approval.
a key control)
approver for review
Sub-process: Recurring Journal Entries: There are three k inds of
and posting. recurring journal entries: standard recurring, formula recurring,
and skeleton. To create a recurring journal entry, it is defined a
Recurring Journal in ERP to act as a templat e for future journal
There is no acceptable entries. It is approved si milar to a standard manual journal
entry.
variance threshold as
09 the journal entry should
For segregation of GLR02:
duties, the reviewer
match the supporting
Personnel responsible for the review and approv al of journal
must be someone documentation. entries ensure that all necessary entries have been prepared and
other than the presented timely for review. Journal entries hav e adequate
preparer. supporting documentat ion and are rev iewed and approved by
Note: someone independent of the journal entry preparer.
02 02 If approval workflow
At month-end, the is enabled in ERP,
The reviewer examines then we don t need
supporting documentation Accounting Manager
reviews and to test the month-
A and approves the entry end report. ERP 2
approves a report of
and the entry is posted to all the journal does not have
the GL. entries. workflow
functionality.

- Manual Key Control - Manual Non- Key Control -Automated Key Control -Automated Non-Key Control - Key SGR - Non- Key SGR
 Process Number Prepared By Date
Alpha Corporation Internal Audit 20XX
Process Name Region Reviewed By Page
GLR GLOBAL 3 of 6

PROCESS AND CONTRO LS OVERVIEW:

Corporate Internal R eporti ng prepares a high level Consolidation

At ERP level at and Reporting Calendar which highlights on a monthly basis t he
At QAD level at
At Corporate/ERP A At QAD level month-end due dates & times for compl etion of signi fi cant milestones of the
month-end
total company close and reporting process. Among these dat es
are deadl ines for calculating and loading currency rates.
Translat ion occurs for indi vidual ERP ledgers in ER P, and within
3.A 3.B 3.B the Financi al Syst em 2 sy stem as part of the consolidat ion
process.
ERP automatically Site Accountant Accounting Manager
inputs period rates reviews and Revaluations are fun
uploads foreign Senior Accountant Currency rates are sourced from the Data Solution Serv ice.
of foreign currencies approves the in ERP as part of Rates are loaded Monday through Friday at 7:00 AM PST
currency exchange prepares the FX
(against their Enhance Controls close process. through an aut omated program into ERP. Two business day s
rates Mon through rates Comparison
Report extracted prior to the end of t he month, a concurrent program is run to
Fri from Data Summary functional currency)
cal cul ate and populate rates and cross-rates in all ERP currency
Solution Service. based on the from ERP 2 to
tables. An additi onal program is run to populat e the next month
information ensure that with the last rate loaded for the month from . This last-day rat e
extracted from the exchange rates are serves as t he period end spot rate for the current month and the
Intranet-ERP Portal consistent with the dai ly rate for the foll owing month.
The FX rates 3.B
Rate Package
Comparison At QAD level the Site Accountant inputs peri od rates of foreign
received from HQ.
Summary is currencies (against t heir functi onal currency) based on the
Two business days reviewed and information extracted from the Intranet – ERP Portal. The dat a
prior to the end of approved by the 3.B
contai ned on the Intranet sit e is generated from an automated
Internal Reporting extract program from ERP.
the month, a Accounting Manager
program is run to Manager.
verifies the FX rates are extract ed from ERP, import ed to FDM, val idated,
calculate and reasonableness of and exported to Fi nancial System 2 on or about WD-2.
populate rates and revaluation impact Translat ions occur i n the Financial System 2 system as part of
Senior Accountant
cross-rates in all ERP of outstanding
the consolidation process.
sends an email to
currency tables. balances in foreign
the Treasury The following rates should be used for currency t ranslat ion and
Director and IT currency and also classificat ion of t he related FX gains and losses:
Applications Analyst Site Accountant that it was properly
to notify rates are ensures that no recorded. Assets and Liabilities: are translated at the period-
uploaded and ready Foreign Exchange end daily spot rate, as of the reporting date, except investment s
transactions are in affil iates, which shall be translated at historical rates based on
An additional for review. the daily spot rate on the date the transaction was origi nally
program is run to pending and that all
recognized.
populate the next Foreign Exchange
Equity: Equity (investment capital ) balances shall
month and the last FX rates are balances are be translated at historical rates based on the daily spot rate
rate loaded for the extracted from ERP, reconciled to For long-term appli cable on the date the transacti on was originally recogni zed.
month from . The imported to FDM, support intercompany loans P&L: Balances in the statement of operat ions shall
last day rate serves validated, and documentation, in a currency be translated based on the period average rate.

as the period end exported to prior to running the different that the
spot rate for the Financial System 2. FX rate revaluation functional currency,
GLR03.B:
current month and functionality in ERP as part of the ERP sites: O n a mont hl y basis, the Controller's team validates
the daily rate for the 2. monthly process of that the rates are accurately l oaded and that translation
following month. foreign currency adjustments are accurate.
Rates are available balances
on myAlpha via the revaluation, this ERP 2 sites:
currency tool. activity is 1. Each mont h-end the personnel responsibl e (or a designee
reclassified in ERP 2 who also does not have access to maintain x-rates) reviews and
approv es x-rate data in ERP t o ensure exchange rat es are
from Gain/Loss to consi stent with the Rat e Package defined at Corporate.
A Liability account. 2. The personnel responsi bl e (or a designee) verifies that the
revaluation of outstanding balances in foreign currency was
correctly calculated and recorded in F/S, and ret ains ev idence.

- Manual Key Control - Manual Non- Key Control -Automated Key Control -Automated Non-Key Control - Key SGR - Non- Key SGR
 Process Number Prepared By Date
Alpha Corporation Internal Audit 20XX
Process Name Region Reviewed By Page
GLR GLOBAL 4 of 6

START ERP ERP 2

PROCESS AND CONTRO LS OVERVIEW:

The COA Maintenance process is a prev enti ve control that assists

in initiating, recording, processing, and reporting new general
ledger accounts and any request for changes (e.g., name or
account # changes) to general ledger accounts. This control also
The initiator of the COA change is Accountant ensures the appropriate mappi ng of all the GL account s to the
COA change request entered into the ERP prepares supporting financial statements.
completes an ERP Data Relationship documentation to
Changes to t he global chart of accounts are managed by the
Chart of Accounts Management (DRM) process COA
Internal Reporting department t hrough the ERP and Data
Update form. System change. Relati onship Management (DRM) systems. All requests are
approv ed by appropriate management before review, approv al,
and processi ng by the DRM administ rator.

04 Requests are made using the standard CO A Request

After COA change is Accounting Manager form located on Collaboration Soft ware. All users have access to
Accountant confirms entered into the this site and may request changes at any time.
reviews and
The request form is forwarded to t he DRM
that the COA Update DRM, a post- approves requested Administrat or. The request is reviewed for completeness and
form is properly adjustment COA log COA change. distributed to the Internal Reporting Director/Manager, the
filled out sheet is printed for External Reporting Director/Manager, and the FP&A
review. representat ive for review and approval.
If t he request is approved at all lev els, it is processed
04 by the DRM Administ rator. Processi ng activi ties include adding/
For creation/ changing values in t he DRM and ERP sy stems, exporting
deletion of accounts metadata fil es wit h changes to MDBMS, Planning, and Financial
After the COA has in local ERP system, Sy stem 2 admi ni strators, updating user manual s, and updat ing/
Accountant sends been updated, an Manager +1 post ing the COA Changes Logsheet. Any new mappi ngs must
completed form to updated notice is performs review and al so be updated in FDM by the l ocal Control lers and/or their
reviewer for sent to individuals designee.
approval. When processing is complete, t he form is routed to
approval. on a routing
the COA di stribution list, which includes the HR Database
distribution checklist Administrat or in Human R esources as well as owners of various
as notification of the systems and modules.
change. An e-mail communication is sent to Financial System
04
At month-end, 2 users alerting them to changes i n the logsheet, which is posted
04 individual who does on Col laboration Soft ware in the same location as the request
not have ability to form.
Reviewer(s) examine The completed form is filed on the Internal
make COA changes
04 Reporting shared drive
form and provide in system reviews a
approval(s). At month-end a log month-end COA
is sent to Financial maintenance report.
System 2 users to GLR04:
update reports and Changes to local GL accounts (including creat ion or deletion) are
mapping approv ed by regional controllers. The consol idated financial
reporting group approves changes to corporate GL accounts and
approv es and v erifies that local COA changes are correctly
mapped t o the corporate COA for US GAAP financial reporting
purposes.
A

- Manual Key Control - Manual Non- Key Control -Automated Key Control -Automated Non-Key Control - Key SGR - Non- Key SGR
 Process Number Prepared By Date
Alpha Corporation Internal Audit 20XX
Process Name Region Reviewed By Page
GLR GLOBAL 5 of 6

PROCESS AND CONTRO LS OVERVIEW:

START A At least quarterly , the accountant reconci les all balance sheet
accounts to: sub-ledger or external application sub -ledger;
third-party document/statement; lead schedul e detailing the
composition of bal ance.

These reconcili ations are made during the closing and must be
Preparers reconcile 06 completed before final activ ity is reported by Alpha at a
balance sheet Obtain necessary consoli dated level . Discrepancies are expl ained and resolved,
accounts to sub- approvals for and the analysis documented on a standard templ ate.
ledger detail, third- unreconciled
party document/ Unreconciled differences require documentation of explanation
differences. and approval in accordance with t he following t hresholds:
statement, or to a
lead schedule that - Under $1,500: Account ant
details the - $1,501 - $15,000: Accounti ng Manager or above
composition of the - $15,001 - $150,000: Regional Controller or above
balance. 06 - Greater t han $150,000: Global Corporate Controll er

Accounting Manager GLR06:

reviews and Subsidiary ledgers and all bal ance sheet accounts are reconciled
approves the monthly utilizing a standardized reconciliation format.
No Reconci ling analyses show comparisons between GL balances,
reconciliation
subsidiary ledgers, and supporting documentation, and all
Follow-up: significant reconci ling items are ident ified, investigated, and
Talk to BPOs about cleared in a timely manner. The appropriate financi al manager
Unreconciled
standard reviews all reconciliations before the financial st atements are
Differences?
reconciliation final ized and distri but ed.
format.
Reviewer does not
have access to
Yes record transactions
in the system.
06
Require
documentation of
explanation and
approvals per
required thresholds

- Manual Key Control - Manual Non- Key Control -Automated Key Control -Automated Non-Key Control - Key SGR - Non- Key SGR
 Process Number Prepared By Date
Alpha Corporation Internal Audit 20XX
Process Name Region Reviewed By Page
GLR GLOBAL 6 of 6

- Manual Key Control - Manual Non- Key Control -Automated Key Control -Automated Non-Key Control - Key SGR - Non- Key SGR