KEY INITIATIVE Internal Control and Technical Accounting Presenter's Name KEY INITIATIVE Internal Control and Technical Accounting Presenter name here Date here

Overview: Internal control and technical accounting Top challenges and how Gartner can help To help companies more efficiently run their controls and compliance functions in this dynamic environment without sacrificing assurance, our research addresses the following common client questions: How do companies implement accounting standards and stabilize process, controls and disclosures? Am I paying the right amount of external audit fees? How can we reduce the overall internal control testing burden? The topics we cover include: Internal controls: Offering strategies and benchmarking to balance assurance and compliance through finance team organization, value-added work using automation, rationalization and talent competencies. Technical accounting: Providing support throughout the life cycle of regulatory and accounting standard issues to help finance leaders summarize impact, develop action plans and understand best practices.

Challenges with internal control and technical accounting 1 2 3 Designing effective controls without overburdening the company One-third of companies believe that the benefits of complying with the Sarbanes Oxley Act of 2002 (SOX) do not outweigh the costs. Compliance hours and costs for SOX have risen 10% or more in the past year for many companies. Not overpaying external audit fees Total audit fees increased year over year for 66% of companies. After inflation, the most common reasons audit firms give for audit fee increases are: Changes in the client company’s operations or structure Acquisitions The incorporation of new accounting standards Keeping up with implementation of new accounting standards Nearly 70% of companies still do not have a lease accounting system in place, though they intended to have selected the software by mid-2018. Gartner analysis of SEC comment letters indicates that companies must clarify disclosures, particularly around areas of significant judgments related to the adoption and pre-adoption of new accounting standards.

Questions your peers are asking Topics Key client issues Internal controls How do companies reduce controls? How do companies minimize the testing burden? How do companies build an internal controls program? Technical accounting How much information do companies disclose about their revenue recognition transition? What are the components of a good revenue recognition policy? How do companies plan to implement and report the new lease accounting standard? How much are companies paying for their audit this year? How much do they expect to pay next year?

Capabilities support each stage of your initiative Diagnose current state Compare with peers your external audit fee costs and levels of customer satisfaction with external audit partners using these audit fee and auditor satisfaction benchmarks. Benchmark against peers your SOX program effectiveness, effort and ownership using this data report. Assess your disclosures against those issued by early adopters of the new revenue recognition standard using this collection of disclosures. Evaluate the maturity of your ICFR framework with this maturity assessment. Develop your plan Develop your negotiating position with your external auditor by reviewing five negotiation objectives for a better external audit engagement. Create your own process mapping documents by referencing those in the accounting process map collection. Design your implementation plan for the lease accounting standard using this Gartner Ignition Guide. Plan to transition to SOX compliance as a newly public company using this Gartner Ignition Guide. Execute and drive change Streamline the number of controls using this Gartner Ignition Guide. Rationalize controls more regularly, as outlined in this whitepaper. Optimize controls testing using this Gartner Ignition Guide. Prevent risks at the accounting process level: Apply recommendations from this financial reporting risks and control deficiencies guide. Address material weaknesses: Access remediation measures in the financial reporting risks and controls database.

Gartner support organized against your timelines Activity roadmap Initiative 0-90 days 91-180 days Internal control and technical accounting Survey Launch: Launch through your service associate the 2019 Audit Fee and Auditor Satisfaction Benchmarks survey to understand if your fees are in line with your peers and compare satisfaction among auditors. Survey Reporting: Review aggregate survey results with an Executive Advisor to identify differences between audit fee rates across industries, company revenue size and type of auditor (Big-Four or Non-Big Four). Actionable Guidance: Develop your negotiating position with your external auditor by reviewing five negotiation objectives for a better external audit engagement. Toolkit: With an Executive Advisor, adapt for your organization proven tools for streamlining controls – included in this Gartner Ignition Guide. Online Resources: Create your own process mapping documents by referencing those in the accounting process map collection. Project Support: With an Executive Advisor, adapt for your organization proven tools for optimizing controls testing – included in this Gartner Ignition Guide. Key Insights: Review with our research team disclosure analysis related to new accounting pronouncements and regulatory changes to see how peer companies are handling disclosures. Diagnostic: Evaluate the maturity of your ICFR framework with this maturity assessment.

Comprehensive support for the finance leader Finance Leader Effectiveness Personal Effectiveness Change Management Finance Function Management Finance Strategy and Org Structure Finance Talent Cost Optimization and Working Capital Cost Structure Working Capital Indirect Spend Management Indirect Strategic Sourcing Indirect Category Management Financial Data and Analytics Financial Data Management Finance Analytics Metrics and Management Reporting Budgeting, Planning and Forecasting Budgeting and Planning Forecasting IT Finance Internal Control and Technical Accounting Internal Controls Technical Accounting Tax and Accounting Processes Tax Operations Record to Report Real Estate Functional Management Customer Relationship Management Real Estate Strategy and Org Structure Shared Services Functional Management Shared Services Strategy and Structure Shared Services Talent Real Estate Optimization Portfolio Strategy Workplace Strategy Shared Services Optimization Shared Services Performance Management Customer Relationship Management Procurement Function Management Strategy and Org Structure Talent Management Strategic Influence Emerging Trends Indirect Supplier Relationship Management Indirect Supplier Performance Management Indirect Supplier Innovation Indirect Supplier Risk Management Financial Strategy and Investor Relations Capital Structure Capital Allocation Investor Relations Finance Technology Optimization Digital Technology in Finance Finance Technology Strategy and Selection Emerging Technologies and Trends Cyber Security and Digital Risk Management Procurement and Strategic Sourcing Applications Procure-to-Pay Applications Contract Lifecycle Management Strategic Sourcing Applications Driving Cost Optimization Across the Enterprise Baseline Efficiency and Effectiveness Cost Optimization Plan Development Cost Optimization Plan Execution Communication and Leading Change Leading the Next Generation Workforce Key Trends Emerging Critical Skills Key Talent Segments Leadership Style and Structure Driving Digital Business Transformation for Industry Leadership Functional Digitization Digital Business Transformation Digital Business Strategy and Innovation