Patent Application
20070055596
Traditionally organizations who prepare financial statements (disclosures ie. Quarterly and Annual Reports consisting of Income Statement, Balance Sheet, Tax Footnote, etc.) for external reporting (to the SEC, public, bankers and financial institutions) by manually gathering financial numbers and embodiment text from various systems and people and using computer desktop applications such as Microsoft Word to create a final deliverable form of the financial report. That Word document both turned into printed material for public distribution and into an SEC required format for delivery to them (today that's Edgarized HTML, but in an embodiment a proposed standard XBRL or another electronic format).
During the period of time that these financial reports are being assembled these organizations have hundreds to thousands of tasks (or process steps) that must be completed in order to ensure the accuracy of the numbers, or descriptive text, within the financial statements. These tasks include all the steps involved in the month end financial close, tasks specific to the reporting period the financial statements are for, tasks involved in the various regulatory or compliance requirements around financial data and reporting (accounting controls). All these tasks are most commonly done by people without the benefit of a system to ensure their completion or accuracy. This means that those deciding that the financial statements are in fact ready for external reporting do so with little to no visibility to the quality of the quantitative data (numbers) or text in those statements.
In financial accounting systems, there exist informal processes that bridge from transaction systems to financial statements that are outside the formal systems of record These procedures, executed throughout the financial organization, are necessary to identify and resolve issues and exceptions. Securities and Exchange Commission (SEC) filings cannot and should not be simply the outputs of enterprise resource planning (ERP) and customer relationship management (CRM) software packages for real companies doing business globally, with many subsidiaries, and lines of business without these judgemental and heretofore manual adjustments. Increased regulatory oversight, scandals, and complex accounting rules are causing a growing number of restatements of earnings and other financial reports and resulting focus on auditable, reproducible, and tracible actions.
It should be apparent that documenting internal controls, evaluating, testing, and remediating internal controls has less value if they are not done in concert with their attestation at a time consistent with a financial reporting period rather than in a vacuum asynchronous from reports that will be relied upon. Similarly, the smooth aggregation, analysis and integration of financial data from transactions systems across a major corporation's subsidiaries, sectors, and consolidation of financial accounts, no matter how smooth is of low value if the financial controls during that period are of questionable validity. Thus it can be appreciated that what is needed is a new system, apparatus, and method for coordinating an integrated management and measurement of both a financial close and the attestation of appropriate internal controls over the data used in the financial close.
This invention provides the ability to know the state (or status) of all the various disparate tasks involved in the processes leading up to the completed financial statements as well as provide qualitative indicators with respect to the completeness and exceptions of these tasks including accounting control tasks. The invention provides a view of this quantitative and qualitative data directly on the exact final visual representation used in external reporting. Imagine taking the annual report for a business entity and sliding onto a computer screen. It then becomes a console that whose framework (labels, lines, tables, etc.) stays constant but the financial numbers for each reporting period along with qualitative indicators showing good or bad status are displayed so that not only can each statement be judged ready or not, but each line item within each statement can be scrutinized.
This framework, or template, mirroring the exact visual appearance of financial statements the organization has prepared in the past can be made electronic and thus the basis for this console by several means: 1) One could employ a programmatic method that parses the common form these statements may exist in (Word, HTML, XML, XBRL, etc.) and be automatically converted to an appropriate data format so as to act as the inventions console. The console is assumed to be a Web Browser based implementation and so the data format of the inventions view of the financial statements would be an appropriate Web Browser format such as HTML, XML, PDF, or other such format. 2) One could create, or use, a WYSIWYG (what you see is what you get) Web Browser editor to recreate the visual appearance of the financial statements seen immediately on screen as they are created. 3) One could also directly write in the source language of these Web Browser formats with in a word processor or editor as a manual process. In this case the final result of the newly created financial statements would not be seen until presented to a Web Browser.
The present invention is a computer implemented method of planning, monitoring, attesting, and recording the steps employed to reconcile all contributions to financial statement line items and footnotes with accuracy and financial controls in an electronic system of recordation. The present invention comprises three elements: One a system of creating, scheduling, and managing a close process. Two a system of creating, managing, testing, and attesting to a set of internal controls. Three a financial statement readiness console which displays to financial management, auditors, and corporate officers a qualitative status of the progress, completion, or need for attention on either the close process or the set of internal controls so that when the quantitative values of each line of the financial accounts is ready for signoff, the executive team and subsequent analysts can also observe the quality of the numbers with respect to internal control testing and attestation, and the completion of all the close tasks related to each financial account. When the readiness console displays sufficient confidence and completion in the close tasks, an electronic close binder is assembled as a system of record for dissemination.
In summary, the present invention comprises a method for a financial close system of record comprising: managing a financial period close process, attesting to adequate internal controls applicable to the period, displaying qualitative status of confidence and quantitative measure of progress in a financial control and electronic archiving of the three as an executable and auditable electronic embodiment of a financial period close binder.
a illustrates a method of defining financial controls.
b illustrates a method of defining financial close tasks.
The present invention is a method of unifying financial reporting, close tasks, and internal controls, the method comprising controlling via a system of automating operations referred to as Sarbannes Oxley or SOX controls, closing through a system of planning and tracking the steps referred to as a financial period close, and displaying the readiness for determining the finality of the financial period close.
The present invention further comprises a system and method for determining readiness, delivery and audit of financial statements. There are three life cycles of this system and a method for using the system in each of the life cycles. Initially, the system is used internally to an enterprise by the financial employees dynamically to close a financial period and prepare the financial statements that accurately reflect the activity during the period and the state of the enterprise at the end of the period. This process is referred to as closing. When the responsible executives believe the financial statements are reliable, they shift the system into the second life cycle which is the formal lock down and delivery of the financial statements to internal and external consumers including regulatory agencies and other interested parties. The third set of users are the analysts and auditors who use the system to explore in detail the underlying controls, logic, assumptions, and judgments that support the financial statements. Each of the methods of use will be discussed in detail.
Referring now to the drawings, a system is illustrated in
The system of
The system of
A method for setting up a financial statement is illustrated in
A method of defining financial controls is illustrated in
A method for defining financial close tasks is illustrated in
A process for assessing financial readiness is illustrated in
A method for assembling a close binder is illustrated in
A method for producing financial statements is illustrated in
The present invention is disclosed as a specification to those skilled in the art of software development. It can be appreciated that various languages and coding styles can be employed to implement the invention which is described in explicit but neutral terms.
An Embodiment
Close Management is a new application built on top of the Movaris Certainty platform. It can be run standalone or integrated with SOX. It allows the customer to:
Glossary
The present invention comprises converting a Close Task list (typically implemented as a simple Excel spreadsheet) into a hierarchical list of scheduled tasks with assignments. The Close Management Application Silo works either standalone or in tandem with the SOX Application Silo.
The present invention further comprises scheduling, executing and tracking these assignments as follows:
These are called References in Close Management. This acts as a repository of golden templates from which Close Task Performers fill out the spreadsheets and then attach to their particular Close Tasks, for each Close.
Analysis and Use Cases.
The use of this product is divided into five areas with Use Cases detailed for each:
Close Days
Role: Close Admin
Suggested Close Manager->Setup->Close Days
navigation paths:
Notifications: None
Audit: -
Security: Only Close Admin can perform this task
The present invention comprises enabling the user to define what number of close days for each type of close—Monthly, Quarterly, and Annually.
Later for each close period the administrator would map actual dates to these defined days.
In an embodiment, the only modification of the Close Calendar allowed is:
For the case of deleting a Close Day, there are two possibilities for solving the problem of Task Definitions that have become invalid due to the deletion:
Define Output Packages
Role: Close Admin
Suggested Close Manager->Setup->Output Packages
navigation paths:
Notifications: None
Audit: -
Security: Only Close Admin can perform this task
Going to Close Manager->Setup->Output Packages gives a list of currently defined Output Packages. To create a new one, click the New button. On the Output Package definition page, fill in these fields:
The default Output Package which is automatically linked to all Close Tasks is called the Close Binder and it is created at install time. It cannot be removed (without Professional Services).
Delete Output Package
Role: Close Admin
Suggested Close Manager->Setup->Output Packages
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
Going to Close Manager->Setup->Output Packages gives a list of the currently defined Output Packages. To delete an Output Package, select the corresponding radio button and click Delete. This Output Package will be deactivated and will not show on the Close Task Definition screen or the Output Packages screen.
Define References
Role: Close Admin
Suggested Close Manager->Setup->References
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
This page allows definition and uploading of the set of reference documents that will be filled out and attached during each close period. ‘References’ is a Platform feature, but the only references visible here are those associated with Close Management. The set of Reference Types will be different than those associated with Sox References. They will be:
Optionally include References in Output Packages.
Define Close Entities
Role: Close Admin
Suggested Close Manager->Setup->Close Entities
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
This page allows definition of a list of Close Entities. There is no limit to the number of Close Entities. Close Entities can be renamed and deactivated. The fields required are:
Upcoming Periods
Role: Close Admin
Suggested Close Manager->Close Periods->Upcoming
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
All the MONTHLY periods defined in the company calendar are available for the close. The close administrator can view the ‘not started’ close periods under ‘Upcoming’ periods.
Mapping Close Days and Dates
Role: Close Admin
Suggested Close Manager->Close Periods->Upcoming
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
From the list of upcoming close periods the administrator could click on the name to see the details. The administrator can then select the type of the close (Monthly, Quarterly, Yearly) and then associate specific dates to the close days. Selecting Monthly, Quarterly, Yearly from the drop down will dynamically change the number and names of close days.
Starting a Close Period
Role: Close Admin
Suggested Close Manager->Close Periods->Upcoming
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
Only upcoming periods could be made current or started. From the detail page of a close period the administrator can click ‘Start’ to make the period current. The following checks will be made:
View Changes to Close Period
Role: Close Admin
Suggested Close Manager->Close Periods->Upcoming
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
All changes to the close period definition are auditable and can be viewed by clicking ‘View Audit’ button.
Warning if Close not started on time
Role: All Close Admins
Suggested None
navigation paths:
Notifications: Email notification
Audit: N/A
Security: N/A
If, on the first defined Close Day of a Close Period, that Close hasn't been started yet, an email notification explaining the situation is sent to every defined Close Admin.
Associating Documents
Role: Close Admin
Suggested Close Manager->Close Periods->Upcoming or
navigation paths: Current
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
Documents can be added to an upcoming or current period. These documents are displayed as a section in close period details and are created as attachments. These documents appear on the Close Manager Console.
Closing a Period
Role: Close Admin
Suggested Close Manager->Close Periods->Current
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
Only a current period can be closed/completed. This is done by clicking on the ‘Close Period’ button. The administrator will be displayed a snapshot of the close manager console and asked for comments before confirming the close. Completion date attribute for the close period is updated and all output packages are generated.
Update a Close
Role: Close Admin
Suggested Close Manager->Period Close->Update
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: N/A
It may be necessary to reopen a Closed Close to update the output packages since any previously open tasks/issues can have had more attachments or transactions made. The UI will be very similar to that for Compete, and when Go is clicked, the output packages are recomputed—these replace the previous output packages for this Close period.
Output Packages
Role: Close Admin
Suggested Close Manager->Close Periods->Completed
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
Output packages are only available for completed/closed periods. Output packages can be download from the detail page of the close period. ‘Close Binder’ will always be available as an output package.
Each Output Package is a Zip file (mime type application/zip) containing:
A hierarchy of directories that exactly matches the Close Task Hierarchy. Each node that is not a Rollup Task contains:
Task Definitions Use Cases
Create a Close Task Definition
Role: Close Admin
Suggested Close Manager->Close Tasks
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
Use the tree navigation to get to the level where the new Close Task is to be created.
Click the New button.
Fill out required information
Provide optional information:
The Close Task Definition can be marked as being contained in any of the defined Output Packages
Can add up to ten Questions (same features as in SOX; used to be called Supporting Data).
Click Save. As with Sox Financial Controls, items that are linked to the definition must be done in an Edit step, not when creating a new definition.
Edit a Close Task Definition
Role: Close Admin
Suggested Close Manager->Close Hierarchy
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
Use the tree navigation or Find field to navigate to the desired Close Task Definition
The following fields can be edited: Name, Number, Description, Instructions, Scheduling frequency, start date, due date, due time, Performer assignment, Approver Assignment (optional), Rollup (check box), Critical (check box), Close Entity (pull-down)
The method comprising linking the Close Task Definition to one or more SOX Financial Controls, Evaluations, Tests or Summary Tests, depending on which was selected as the SOX Control link type at installation time, further comprising linking to any of the four types and have the drilldown on the console go to a new, SOX mixed results page.
The Close Task Definition can be marked as being contained in any of the defined Output Packages, can link references, and can add up to ten Questions.
If Rollup is selected, then there is no actual Close Task Action Plan associated with this Close Task. So the following fields are not required (and should be hidden on the screen):
Scheduling frequency can be:
“As needed” Tasks don't have Start or Due dates pre-set. They are started manually from the Task List View with the due date being collected there. Tasks can only be Due on a date in the Close Calendar. Tasks can be started on any date in the Close Calendar, or up to ‘n’ days before the first day. The maximum offset in days before the first Close Day is somewhat arbitrarily set to 15, but is implemented via a hidden System Property so if a different maximum is desired, it can be implemented. The Start and Due pull-downs dynamically show the defined names for the correct Close Days depending on the current value of the frequency.
If a Task is updated while a Close is started but the particular Task hasn't executed yet, then the transaction for that Task is updated appropriately. If the start date was changed such that it should already have been running, it is executed as part of the Save.
Link a SOX FC/Evaluation/Test/Summary Test to a Close Task Definition
Role: Close Admin
Suggested Close Manager->Close Tasks
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
Use the tree navigation or Find field to navigate to the desired Close Task Definition
In the Related SOX Financial Controls section, click the Link button.
A new SOX popup chooser will appear with radio buttons for the object type:
Pick one and enter a search string and click Find. The matches will be returned—select the one(s) desired and click Choose.
Results for the Linked SOX objects will be shown in the Close Console in the “Key Close Controls—Testing” section. The SOX controls that are reported on in this section are the ones that have already started on any day of the Close Period, regardless of scheduled frequency. This includes manually initiated controls.
Unlink a SOX FC/Evaluation/Test/Summary Test from a Close Task Definition
Role: Close Admin
Suggested Close Manager->Close Tasks
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
Use the tree navigation or Find field to navigate to the desired Close Task Definition. In the Related SOX Financial Controls section, select a linked SOX object and click Unlink.
Delete a Close Task Definition
Role: Close Admin
Suggested Close Manager->Close Tasks
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
Use the tree navigation or Find field to navigate to the desired Close Task Definition. Click Delete. Deleted tasks are not removed from the database, just marked disabled. If any sub-tasks are present, a popup warning is first given, but if Ok is selected, the Task and all Sub-Tasks are marked disabled and are removed from the UI.
If a Close is currently running, there are two cases:
Optionally removing these transactions from display instead of marking them deleted.
Copy a Close Task Definition
Role: Close Admin
Suggested Close Manager->Close Tasks
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
Use the tree navigation or Find field to navigate to the desired Close Task Definition. Click the Copy button. A new Close Task definition will be created with the same parent. It will have the text “Copy mm/dd/yyyy hh:mm:ss” appended to the Name and Number fields. Any child tasks (and their children etc) will be copied as well.
View Changes to a Close Task Definition
Role: Close Admin
Suggested Close Manager->Close Tasks
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
Use the tree navigation or Find field to navigate to the desired Close Task Definition. Click the View Audit button.
Move a Close Task Definition
Role: Close Admin
Suggested Close Manager->Close Tasks
navigation paths:
Notifications: None
Audit: All changes are tracked in the Audit Trail
Security: Only Close Admin can perform this task
Use the tree navigation or Find field to navigate to the desired Close Task Definition. Click the Move button. Enter a search string in the Close Task popup finder. The move target (new parent) will be limited to Tasks that are not descendents of the Task being moved.
Add Task to current period
Role: Close Admin
Suggested Close Manager->Close Tasks
navigation paths:
Notifications: None
Audit: Yes
Security: Only Close Admin can perform this task
Once a close period has started (i.e. there is a current close period) any newly created tasks will not be added to current close period. The administrator could add them by manually clicking the button ‘add to current close’. The action will fail under the following conditions:
View Results
Role: Close Admin
Suggested Close Manager->Close Tasks
navigation paths:
Notifications: None
Audit: Yes
Security: Only Close Admin can perform this task
From the task definition the administrator should be able to view the results of the various executions of that task by clicking the ‘results’ button.
Tree View
Role: Close Admin
Suggested Close Manager->Close Tasks
navigation paths:
Notifications: None
Audit: NA
Security: Only Close Admin can perform this task
The task definitions are also presented in the tree view format. The administrator should be able to view the task hierarchy. Clicking on the task hierarchy node will also present the task definition screen.
Close Task Execution Use Cases
Here is the flow of the Close Task Action Plan
A close task process comprising the steps of submitting a close task action, selecting a close task performer, performing the close task, approving the close task, and closing the task action.
Manually start a Close Task
A close task can NEVER be manually started from the definition. Only task within a close period can be started either via the scheduler or manually. Only tasks marked ‘As Needed’ can start manually and only as part of a current close period.
Perform a Close Task
Click on Email link or use Inbox or Search feature to bring up PDF for Close Task. Fill out any fields. Optionally attach file(s). Optionally create an Issue (see section 4.3.5). Click Submit. Can Delegate instead of Submit.
Approve a Close Task
Click on Email link or use Inbox or Search feature to bring up PDF for Close Task. Optionally attach file(s). Optionally create an Issue by clicking the “Create Issue” button in the toolbar. <This may have to do an auto-save>. Click Submit. Can Delegate instead of Submit.
Reject a Close Task
Click on Email link or use Inbox or Search feature to bring up PDF for Close Task. Optionally attach file(s). Optionally create an Issue by clicking the “Create Issue” button in the toolbar. <This may have to do an auto-save>Click Reject. Reject can only go back one signature level.
See Overdue Close Tasks
The Overdue Control Activities pie chart shows any overdue Close Task Action plans in the user's inbox.
Close Issue Action Plan
There will be a new Close Issue Action Plan created for Close Management. Since the Close Process is much more time sensitive that SOX, the routing is simplified compare to the SOX Issue Action Plan comprising the steps of submitting a close issue action, if the user is not admin, approving the issue, submit an adhoc issue owner, if the user is admin, assigning an issue owner to document plan, documenting a plan to address the issue, approving a plan to address the issue, and closing the issue.
Create an Issue from a Close Action Plan
Click the new standard toolbar button “Create Issue”.
This will initiate a “behind the scenes” Save of the current Close Task Action Plan. [Maybe with a popup]
The Issue Action Plan will come up with the name of the Close Task mapped.
Fill in the remainder of the Action Plan
Click Submit
The Routing Panel will show a pull-down containing all the currently defined Close Administrators.
Optionally add attachments/comments.
Click Send.
Create an Issue from My Certainty
View a Close Task List—Transactional
Role: Close Admin
Suggested Close Manager->Close Manager Console->Close
navigation paths: Tasklist
Notifications: None
Audit: None
Security: Only Close Admin can perform this task
The tree navigation contains ALL tasks including Rollup and “As Needed”. But the Close Task list doesn't contain Rollup Tasks (since there is no associated Action Plan). “As Needed” Tasks are shown in a separate section at the bottom of the Task List. Each task listed in the “As Needed” section has a check-box, and there is a “Start Now” button that, when clicked, prompts for a due date and time, then the selected Task(s) is/are started. Once one of these Tasks is started, it displays in the normal part of the Task List.
The possible states (Status) of each Task in the Task List are selected from the group comprising:
The Task names in the Task List are links to the Action Plan, but links to the Task Definition in the case of “As Needed” or “Not Started” Tasks.
Tasks that have been linked to at least one SOX Control are flagged with an asterisk.
Export a Close Task List—Transactional
Role: Close Admin
Suggested Close Manager->Close Manager Console->Close
navigation paths: Tasklist
Notifications: None
Audit: None
Security: Only Close Admin can perform this task
The “Export to Excel” button on the Tasklist View screen returns an excel file containing the information currently viewed on the Tasklist screen.
Add Comments to Tasks for a Close
Role: Close Admin
Suggested Close Manager->Close Manager Console->Close
navigation paths: Tasklist
Notifications: None
Audit: None
Security: Only Close Admin can perform this task
For each task the administrator could add a comment by selecting the task and then clicking on the ‘Comments’ button.
Customize Tasklist View
Role: Close Admin
Suggested Close Manager->Close Manager Console->Close
navigation paths: Tasklist
Notifications: None
Audit: None
Security: Only Close Admin can perform this task
The administrator can customize the task list view by clicking the ‘customize view’ link to the top right. This will give the user filter options for the tasklist view.
Close Manager Console
Role: Close Admin
Suggested Close Manager->Close Manager Console
navigation paths:
Notifications: None
Audit: None
Security: Only Close Admin can perform this task
The close manager console display comprising the following elements:
View a Filtered Close Task List—Transactional
Role: Close Admin
Suggested Close Manager->Close Console->Click on Task Pie
navigation paths: chart
Notifications: None
Audit: None
Security: Only Close Admin can perform this task
Drilling down from a Pie chart brings up a filtered view of Tasks with status.
View a Filtered Issue Results List
Role: Close Admin
Suggested Close Manager->Close Console->Click on Issues
navigation paths: Pie chart
Notifications: None
Audit: None
Security: Only Close Admin can perform this task
Drilling down from a Pie chart brings up a filtered Results list of Issues.
Close Transaction and Output Package Use Cases
Retrieve an Output Package
Role: Close Admin
Suggested Close Manager->Binder Output
navigation paths:
Notifications: None
Audit: None
Security: Only Close Admin can perform this task
Information Architecture Changes
If the Close Management feature is installed (enabled in the license file), Close Administrators see a new top level tab “Close Management” in the UI. This tab has the following sub-tabs:
Data Objects/Java Classes.
Each of the following 17 Objects will be implemented using the Connector pattern for data access.
New System Values
Close Reference Types
A new LOV family called ‘closereftype’ will be created to contain the different possibilities for Close Reference Types. In LOV_SYS_GROUP:
Name: Close Reference Type
Export: closereftype
Can Deactivate: No
Can Add: Yes
Can Rename: Yes
In LOV_SYS:
Name, Short name, Export, Order
‘Approved template’, ‘A’, ‘A’, 1
‘Close Documentation’, ‘C’, ‘C’, 2
‘Reference Document’, ‘R’, ‘R’, 3
‘Other’, ‘O’, ‘O’, 4
Close Status Types
A new LOV family called ‘closestatustype’ will be created to contain the different possibilities for Close Status Types. In LOV_SYS_GROUP:
Name: Close Status Type
Export: closestatustype
Can Deactivate: No
Can Add: No
Can Rename: No
In LOV_SYS:
Name, Short name, Export, Order
‘Not Started, ‘N’, ‘N’, 1
‘In Progress’, ‘P’, ‘P’, 2
‘Complete, ‘C’, ‘C’, 3
Close Source Types
A new LOV family called ‘closesourcetype’ will be created to contain the different possibilities for Close Source Types. These are needed so that the various Close
Data Objects can be audited. In LOV_SYS_GROUP:
Name: Close Source Type
Export: closesourcetype
Can Deactivate: No
Can Add: No
Can Rename: No
In LOV_SYS: a row for each of the 17 Close tables. The Export column is the exact name of the table, for instance: CL_PERIOD.
Managers
Managers are classes that contain business logic. Four Managers will be introduced to manage Close activities. The four Managers are derived from an empty base class CloseManager which is introduced to make the design more flexible. For example, if we later decide to use a Manager framework, this class can extend or implement the base framework class, so that all the CloseManagers defined here can benefit from the framework.
The CloseManagers are all singletons in this class structure comprising a closesetupmanager, a closesecuritymanager, a closetransactionmanager, and a closeuimanager.
CloseSetupManager
CloseSetupManager handles is used to perform actions on any of the definitional information associated with Close Management:
CloseTransactionManager is used to perform actions on any of the transactional information associated with Close Management:
Generalized TreePathCache
In SOX, there is one data structure that very closely mirrors that for Close Task Definitions and for Close Task Transactions: the Business Unit tree. Since the FCC needs to do Unit aggregation, the UnitIdPathCache class was implemented for release 8.1. This class implements an in-memory, lazily-evaluated caching mechanism that provides two public methods:
Two generalizations of this mechanism are needed for Close Management and will extend an abstract base class called TreePathCache:
The keys would be Close Task ids for CloseTaskDefinitionTreePathCache( ) and a combination of a Close Period Id and a Close Transaction Id for CloseTransactionTreePathCache( ).
Close Issue Action Plan
There may be a new Close Issue Action Plan—it was decided to implement a separate (new) Action Plan rather than to try and leverage the existing SOX Issue Action Plan, even though that is technically possible. Future maintenance will be much simple with this approach.
There are two modes of use for the Close Issue Action Plan:
Invocation from the My Certainty
Anyone may initiate a Close Issue Action Plan from My Certainty, however, this can only be done during the period that there is a Close in progress. The Close Issue Action plan is presented, linked to the current Close Period, but not to any specific Close Task.
Methods
A method is disclosed of using the financial statement console by auditors or analysts to understand the locked reports by examining all data and processes that contributed to completed financial statements comprised of viewing text labels, numerical values, and variable clickable symbols displayed on the visual display of a top level financial statement template and clicking on the variable clickable symbols that denote subjective importance, caution, or key issues thereby navigating to either another financial statement template, or to another navigational aide such as a list of items including as an illustration: financial close task status and information; financial control (including SOX) status and information; enterprise resource planning and financial systems links; analytics, business Intelligence and FP&A system links; or unstructured data.
A method is disclosed of using the financial statement console by responsible executives upon their determination that the statements present fairly the financial position and results of operations of their enterprise to sign, lock down, write protect any all data beneath the top level financial statement template comprising the steps of date/time stamping as part of a particular Financial Statement period; executing a digital signature (PKI or other); executing a database storage access protection process; executing a data archival process into a static protected format (such as locked Acrobat PDF, or locked Msft Office tool file formats) and creating one or more output packages that may be transmitted and externally used.
A method is disclosed for creating a financial statement readiness console comprising the steps of importing a previously used Financial Statements (FS) as a template (these can be hierarchical in nature with one FS at the top with lower level FS's rolling up to the top FS; activating the imported FS's as visual maps into the financial metadata that provide both quantitative and qualitative information about each and every item (row, column and text label) of each financial statement said financial metadata comprising:
A method for creating a dynamic financial statement readiness console is disclosed comprising the steps of connecting key financial close processes to a display of financial statement line items, connecting Sarbannes-Oxley financial control certification monitoring to financial statements, connecting annotated supporting documents to financial statement fields, connecting close process task tracking to financial statement line items, connecting subjectively graded risk assessments to financial statement line items, displaying the status or progress of close tasks graphically on financial statement, displaying the aggregate level of confidence or assessment of quality on financial statement, extracting the essential line items from a previous report submitted to regulatory agencies, associating one or more financial accounts to each essential line item, linking the financial statement account to close tasks assigned to closing the account, linking internal controls to close tasks, linking financial statement accounts to close issues, displaying an aggregate report and graphic illustrating the severity of close issues, the percent and number of close tasks completed, the percent and number of key close controls within compliance, the target dates, and the dates of completion; displaying a hierarchy of categories of tasks, controls, and supporting documents; displaying the detailed description of close tasks scheduled by day of the close period, responsibility, status, and approval; displaying qualitative information about the readiness of a financial statement; displaying a income statement with clickable symbols to pop detailed information for each line item; displaying an audit trail of how line item data was extracted from an ERP system; displaying a status of the testing of controls for each item of a financial statement; displaying the date of the close period on the financial statement; and initiating archival, syndication, conversion, translation, and submission when digitally approved.
Additional Methods:
A computer implemented method of preparing and issuing a financial report to regulatory agencies comprising the steps of selecting a graphical icon on an image of a pro form a financial display; displaying a list of one or more tasks contributing to the closing of each financial account; displaying a graphical element illustrating the subjective confidence in the quality of each financial account; selecting a numerical element on an image of a pro form a financial display; displaying the source document supporting a numerical element; displaying the calculation supporting a numerical element; displaying the assigned responsibilities for performing each task; and digitally signing the financial report to archive the data, extract a file for submission according to the specification of the regulatory agency, and publish the report to authorized readers.
A computer-implemented method of displaying the intermediate results and progress of performing a financial close of an accounting period illustrated in
A method, tangibly implemented in a computer system, for closing a financial accounting period, comprising the steps of establishing a work calendar, nomenclature, and number of work days in a window relative to the close date of a financial period appropriate to the business and financial policies of the enterprise; defining the electronic contents of a close binder which would be the work product and record of all tasks, activities, and decisions deemed necessary to record, document, and illustrate the best practices associated with performing a financial close appropriate to the business and financial policies of the enterprise; identifying organizations, departments, or functions that would be responsible for executing, completing, verifying, or escalating issues necessary for the timely completion of the electronic contents of a close binder for any period; assigning individuals and recording their contact information for each of the roles defined necessary to perform, audit, or escalate the issues surrounding the creation of a close binder; synchronizing the close date to a plurality of calendar dates according to the computer system wherein the begin and due date of tasks relative to a close date can be computed to determine the begin and due dates of activities by the calendar; coordinating the activities of the individuals assigned to perform the tasks associated with creating a close binder, further comprising notifying, monitoring, tracking, and escalating the individual and his progress or timely completion of tasks; recording the results of the close task activities, further comprising the attachment of supporting electronic documents, the notes made supporting decisions, the data from external sources entered into the system, the reconciliations of various inputs, and official signatures of attestation; upon attestation that all tasks have been completed, all exceptions have been annotated, all issues have been addressed, and all results are correct, formally closing the financial period and locking down the close binder from further modification; and distributing the selected contents of the close binder to authorized consumers of the information such as the securities and exchange commission, financial accounting services, and the board of directors.
The method tangibly implemented on a computer system for reopening and reclosing the books comprising the steps of placing a close binder under source code control, proposing changes, documenting changes, explaining changes, approving or rejecting changes, locking down with recorded authorship and approval of changes and redistributing the close binder with changed results marked as corrections.
The method tangibly implemented on a computer system of scheduling and monitoring tasks of a financial close comprising the following steps of comparing the plurality of close dates of financial periods to the system clock to obtain the offset; comparing the list of completed tasks to the list of tasks that should be activated according to the offset date from any close date; notifying the individuals, organizations, departments, or function of their desired activity relative to tasks scheduled for the timely completion of a financial close; displaying the status of activities in the list of all activities necessary for the timely completion of the financial close to the plurality of managers responsible for its success; and escalating the absence of completion or activity as a new issue to the attention of managers responsible for the completion of the financial close.
The method tangibly implemented in a computer system of archiving and syndicating all of the electronic files associated with a financial close including electronically signed documents of attestation, best practices and directed procedures, reports from external entities or enterprise resource planning systems, records of changes and modifications, memorandum of decisions, results of computations and the formulas supporting them, audits of physical or financial assets, and an electronic signature ensuring integrity of the archive or syndication.
The method tangibly implemented in a computer system of linking tasks defined in a financial close system to elements of a Sarbannes-Oxley system of financial controls so that notes related to compliance or non-compliance to financial controls can automatically transfer to the financial close system thereby documenting non-compliance yet still enabling the forcing of a financial period close.
The method tangibly implemented in a computer system of assigning tasks relative to a close date, computing the offset to the close date compared to the system calendar, electronically notifying individuals of the begin and end date of their tasks, recording activity, inactivity, or completion of tasks for display to managers responsible for timely completion of the close, archiving and producing an output package that is self contained in documenting the procedures, calculations, initiating and resolving of issues, assignment of responsibility, assumptions, exceptions, notes, reports, adjustments, and attestation of the results for syndication.
A method comprising linking a computer implemented display of an element of a financial statement to firstly one or more computer monitored financial period close processes and linking the display of said element secondly to one or more computer monitored financial controls wherein the element of a financial statement may be a footnote or paragraph or financial statement line item, whereby a control panel may display a visual representation of the progress and quality of each element of a financial statement said representation being a computer selectable element of a control panel.
A method comprising aggregating the status of a plurality of financial controls to cause a summary display and a selectable detailed display of all financial controls that pertain to an element of a financial statement displayed in a control panel, and further comprising aggregating the progress of a plurality of financial period close processes to cause a summary display and a selectable detailed display of all financial period close processes that pertain to an element of a financial statement displayed in a control panel.
A method for building an electronic close binder comprising
A system for preparing integrated reports of regulated corporate entities, tangibly implemented in a network attaching computers, displays, and storage devices in which are readably encoded processor instructions, comprising the following methods: displaying a financial statement readiness console, closing a financial accounting period, and complying to standards mandating attestation to proper internal management controls.
A system for preparing integrated reports of regulated corporate entities, tangibly implemented in a network attaching computers, displays, and storage devices in which are readably encoded processor instructions, comprising the following methods:
The method further comprises displaying qualitative assessment of internal controls wherein a clickable icon, graphic, or text button is displayed which upon being activated then displaying one or more statistics supporting the qualitative assessment selected from the group following:
The method further comprises displaying qualitative assessment of financial close process wherein a clickable icon, graphic, or text button is displayed which upon being activated then displaying one or more statistics supporting the qualitative assessment selected from the group following:
The method of defining a dual hierarchy of controls and actors further comprising; listing high level control objectives attached to a plurality of control tasks that support the attainment of the control objectives which may be less abstract and more procedural in descending the hierarchy; and listing high level officers or executives who are responsible for attesting to the existence and use of high level controls attached to a plurality of potential actors within a financial management organization who may be supervisory, advisory, or operational in role in descending the hierarchy and wherein the upper level of actors attain their upper level controls by assigning and tracking their lower level actors to more detailed lower level controls in the control hierarchy.
Although particular embodiments of the present invention have been shown and described, it will be obvious to those skilled in the art that changes and modifications may be made without departing from the present invention in its broader aspects, and therefore, the appended claims are to encompass within their scope all such changes and modifications that fall within the true scope of the present invention.
Traditionally organizations who prepare financial statements (e.g. Quarterly and Annual Reports consisting of Income Statement, Balance Sheet, Tax Footnote, etc.) for external reporting (to the SEC, public, bankers and financial institutions) by manually gathering financial numbers and embodiment text from various systems and people and using computer desktop applications such as Microsoft Word to create a final deliverable form of the financial report. That Word document both turned into printed material for public distribution and into an SEC required format for delivery to them (today that's Edgarized HTML, but maybe XBRL or another electronic format).
During the period of time that these financial reports are being assembled these organizations have hundreds to thousands of tasks (or process steps) that must be completed in order to ensure the accuracy of the numbers, or descriptive text, within the financial statements. These tasks include all the steps involved in the month end financial close, tasks specific to the reporting period the financial statements are for, tasks involved in the various regulatory or compliance requirements around financial data and reporting (accounting controls). All these tasks are most commonly done by people without the benefit of a system to ensure their completion or accuracy. This means that those deciding that the financial statements are in fact ready for external reporting do so with little to no visibility to the quality of the quantitative data (numbers) or text in those statements.
This invention provides the ability to know the state (or status) of all the various disparate tasks involved in the processes leading up to the completed financial statements as well as provide qualitative indicators with respect to the completeness and exceptions of these tasks including accounting control tasks. The invention provides a view of this quantitative and qualitative data directly on the exact final visual representation used in external reporting. Imagine taking the annual report for a business entity and sliding onto a computer screen. It then becomes a console that whose framework (labels, lines, tables, etc.) stays constant but the financial numbers for each reporting period along with qualitative indicators showing good or bad status are displayed so that not only can each statement be judged ready or not, but each line item within each statement can be scrutinized.
This framework, or template, mirroring the exact visual appearance of financial statements the organization has prepared in the past can be made electronic and thus the basis for this console by several means: 1) One could employ a programmatic method that parses the common form these statements may exist in (Word, HTML, XML, XBRL, etc.) and be automatically converted to an appropriate data format so as to act as the inventions console. The console is assumed to be a Web Browser based implementation and so the data format of the inventions view of the financial statements would be an appropriate Web Browser format such as HTML, XML, PDF, or other such format. 2) One could create, or use, a WYSIWYG (what you see is what you get) Web Browser editor to recreate the visual appearance of the financial statements seen immediately on screen as they are created. 3) One could also directly write in the source language of these Web Browser formats with in a word processor or editor as a manual process. In this case the final result of the newly created financial statements would not be seen until presented to a Web Browser.
The invention then further provides for a way to link each piece of financial data that will be fed into this console with the tasks (financial close or other) and also the financial controls. This is a link of one to many with one piece of quantitative financial data on the financial statement being linked to potentially man tasks and financial controls. This linking is done by associating a financial account (e.g. Financial Statement Account, General Ledger Code, Account Number, etc.) with the financial statement quantitative data and all the related tasks and financial controls.
This now provides a financial statement readiness console showing a familiar view of financial statements with quantitative and qualitative information flowing into this console for determining when external reporting can be done. The flow of information into this console is covered by other areas of this invention.
The present application claims the benefit of priority under 35 U.S.C. sctn. 119(e) from U.S. Provisional Patent Application No. 60/596,055 filed on Aug. 26, 2005 first named inventor Steve Yankovich.
| Number | Date | Country | |
|---|---|---|---|
| 60596055 | Aug 2005 | US |
