The new regulations on financial statements and controls require a review of the procedures for collecting, retaining and managing information.
What is Regulatory Compliance?
The Regulatory Compliance Laws require public companies to evaluate, review, restructure and make a detailed report of the internal controls established for the financial statements. The external auditors must give the report as a “clean note”. These laws seek to prevent financial errors and reduce fraud in public companies.
Data management:
IT is an important tool when it comes to data management to ensure regulatory compliance. IT tools are used to access and maintain records, and to protect financial systems from misuse. Here are some tips to ensure good data management practices.
1) Appropriate management must be notified of the ownership of data management and must understand their responsibilities.
2) Data systems should be listed, their administrators notified, and the number of databases, types of information software used, underlying operating system, access conditions, and other utilities should be listed.
3) Review potential threats to the information stored in the databases and request periodic reassessments.
4) The data must be properly catalogued, so that extraction and monitoring are easier.
5) There must be a backup of the data.
6) The responsibilities for the management of the database must be delegated in a way that prevents unauthorized access to the information, as well as the alteration of the data.
Database management: Database administrators.
To ensure regulatory compliance, database management is divided into different tasks and each task is delegated to a database administrator or DBA. DBA responsibilities include:
1) Be responsible for the integrity of the data.
2) Authorization and monitoring of modifications to the database and system security management.
3) Ensure a proper backup of the database.
4) Ensure that the database is infallible against unauthorized access.
5) Maintain a list of all databases and databases other than their own to which they access the information.
6) Maintain appropriate documents that establish that they follow legal practices regarding access and privileges.
7) Test the database record validation procedures.
8) Rectify the database quickly when unauthorized access and changes in the database are noticed.
9) Ensure that in the event of accidental or premeditated loss of data, these can be recovered in the shortest possible time so that the business is not affected.
Database management procedures must satisfy auditors, be legal, and use correct audit methods. There are companies that provide these services. However, they must be aware of their duties and responsibilities and ensure regulatory compliance of their database management processes. Updating the database system and implementing proper controls for the access and flow of information keeps the organization in the good books of auditors and prevents financial scandals.