Developing a robust revenue assurance function

Background and challenge

The client was confronted by the continuous challenge of keeping pace with the increasing complexity of financial reporting and disclosure requirements. In addition, prevalent stringent regulatory environment had put the organization’s accounting practices under the spotlight with greater amount of scrutiny by the stakeholders

Disparate accounting practices followed within the company across various geographies, coupled with the intricacies of their business environment and transactions accentuated the issue and made it tougher for the company to manage their accounting and finance processes and often found themselves hard pressed to meet the additional regulatory requirements

The client engaged Bough as their accounting advisors to work alongside their internal teams and provide the depth of knowledge and experience necessary to address these eclectic accounting issues faced by the company.

Solution

Strategic intervention by Bough to navigate complexity with expertise

• Bough leveraged their subject matter expertise and assessed the client’s accounting and finance processes and controls, primarily focusing on the timeliness and accuracy of the financial and management reporting
• Reviewed client’s business transactions across various geographies including North America, Latin America, Europe, Middle East and Africa and the Asia-Pacific regions
• Applied our in-depth understanding of the client’s business and nature of revenue arrangements to:
  • identify underlying risks
  • assess adequacy of existing controls and procedures around revenue recognition; and
  • highlight areas of concern due to inefficient/loosely implemented processes and controls
• Worked closely with the management and external audit team to:
  • validate components of financial data
  • perform cut-off procedures
  • execute key SOX controls involving revenue recognition related to software license provisioning and resolve issues
  • review auditor’s exceptions listing from revenue testing procedures performed in prior periods to devise remediation plans
  • proposed process & control enhancements to prevent future issues
• Acted as a liaison between the Company and the audit team to ensure that the audit is completed timely and efficiently

  Example of high-level audit response process workflow

  
• Prepared technical accounting calculations, policies, and memos, as required
• Reconciled balance sheets, as appropriate for each audit period
• Deployed a full-time augmented staff that played role within the company’s operational accounting function and proactively planned/executed necessary daily, weekly, monthly, and quarterly accounting activities as required

Results

Enhancing audit effectiveness and quality

• With Bough’s assistance, the client was able to address and resolve the critical accounting issues and make informed business decisions on their financial reporting procedures
• As there is a need to be answerable to the stakeholders, management relied on Bough as trusted advisors to equip them with relevant information around the current accounting practices within the organization and implications of the various accounting issues on their business
• Established detailed technical accounting memos, policies and thought leadership material pertaining to key processes and controls around revenue reporting and documented accounting procedures to retain critical knowledge and train new employees. These efforts resulted in streamlining the accounting practices within the company and enabled accurate and timely financial reporting for the client
• Enhanced cost-effectiveness achieved by reducing effort in transaction testing through process automation and technology utilization, resulting in improved efficiency
• Synergy exhibited by the Bough team working out of the US and the India offices throughout the project, provided the client with a virtual 24-hour workday facilitating a quicker turnaround of the deliverables and expedited engagement delivery