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Compliance Within Lawson M3
John Chandler
Product Management - Financials
[email protected]
The Lawson Product Offering
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 3
The Lawson Industry Offer
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 4
With Focus on Specific Markets…..
..wherever our customers choose to operate…..
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 5
Global Integrated Financials for IFO’s - Introduction
The order flow
Procurement
S
u
p
p
l
i
e
r
s
Production
planning
Sales &
order
C
u
s
t
o
m
e
r
s
The logistic flow
Receipt
handling
Production
Warehouse/
Distribution
The financial flow
Accounts
payable
General
ledger
Managing the financial flow
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Accounts
receivable
Monitor the Performance of other flows
13/04/2015
Page 6
M3 Financials - supporting our Customers
Managing the financial supply chain
Allowing users to work in ways that they wish
Providing information – to internal/external customers
Using technology for efficient financial processes
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
13/04/2015
Page 7
Disclaimer regarding future product discussion
This presentation includes information about future development plans of the
Lawson Product Development organization. By providing this update, Lawson is
not promising to develop, deliver or market any specific product, functionality or
service. Lawson makes no representations or warranties about the contents of this
document, and specifically disclaims any express or implied warranties of
merchantability or fitness for any particular purpose. Further, Lawson reserves the
right to change its future products or services offerings at any time without
obligation to notify anyone of these changes. Customers under maintenance are
not specifically entitled to anything on the roadmap or what is included in this
presentation.
Disclaimer regarding use of screen shots in this presentation
This presentation has been prepared to demonstrate a variety of
ways that Lawson software applications and tools can be set up and
utilized by customers. The screen shots provided may not be
standard, out-of-the-box reports, but may require your organization to
engage Lawson Professional Services in order for the applications or
tools to work as shown.
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 8
M3 Financials and Compliance
Introduction –
Company…..
Business Processes….
Accounting Transactions……
Financial Reporting….…
Audit Trail…..
Summary
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 9
Compliance - sometimes we get mail on this topic
Copyright © 2008. Lawson Software. Presentation GAM3 2008
13/04/2015
Page 10
Compliance - sometimes we get mail on this topic
Copyright © 2008. Lawson Software. Presentation GAM3 2008
13/04/2015
Page 11
Implementing Compliance in
Movex
Understanding the Law
The Sarbanes-Oxley Act established new and enhanced standards for
corporate accountability, as well as severe penalties for corporate
wrongdoing. Good corporate governance and ethical business practices
are now the law.
Disclosure Controls
• Designed to ensure that required disclosed information is
recorded, processed, summarized, and reported within
the time periods specified by the SEC.
Internal Controls
• Controls that pertain to the preparation of financial statements
for external purposes that are fairly presented in conformity
with generally accepted accounting principles.
• Include controls and procedures to help ensure that the
required disclosed information is accumulated and
communicated to management to allow timely decisions
regarding required disclosure.
Preservation Controls
• Designed to ensure that all audit records, material financial
transactions, related communications, working papers, and
other data, is preserved, protected from alteration, and readily
available.
Primary Areas of Regulation under Sarbanes-Oxley
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 13
SEC.404 - Corporate responsibility for the financial reporting process
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 14
Sarbanes-Oxley – Relevant Sections
Section 404
–
Requires management to annually:
 State their responsibility for establishing and maintaining an adequate
internal control structure and procedures for financial reporting
 Conduct an assessment of the effectiveness of the company’s internal
controls and procedures for financial reporting
–
Requires the independent auditor to:
 Attest to management’s assertion (requires a framework such as
COSO)
Section 409
–
Real Time Disclosures:
 Issuers are required to disclose to the public, on an urgent basis,
information on material changes in their financial condition or
operations. These disclosures are to be presented in terms that are
easy to understand supported by trend and qualitative information of
graphic presentations as appropriate.
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 15
Section 302 Certifications……..
 Certifications must include:
– CEO and CFO have reviewed the periodic filing and to their
knowledge, information provided presents fairly the financial results
of the company.
– CEO and CFO have established and maintain disclosure controls
and procedures that ensure that all material information is made
known to them.
– CEO and CFO have evaluated the effectiveness of the disclosure
controls and procedures as of 90 days prior to the date of the
periodic report and presented their conclusions in the report.
– CEO and CFO have disclosed all internal control deficiencies and
any fraud, whether or not significant, that involves management or
other employees who have a significant role in the companies
internal controls.
– Statement of whether the company has established a Code of Ethics
for senior financial officers.
– Other miscellaneous items.
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 16
COSO – Internal Control Framework
Monitoring
Control Activities
 Assessment of a control system’s
 Policies/procedures that ensure
performance over time.
management directives are
carried out.
 Combination of ongoing and separate
 Range of activities including
evaluation.
approvals, authorizations,
verifications, recommendations,
performance reviews, asset
security and segregation of
duties.
 Management and supervisory activities.
 Internal audit activities.
Information and Communication
 Pertinent information identified, captured and
communicated in a timely manner.
 Access to internal and externally generated
information.
 Flow of information that allows for successful
control actions from instructions on
responsibilities to summary of findings for
management action.
Control Environment
 Sets tone of organization-influencing control
consciousness of its people.
 Factors include integrity, ethical values,
competence, authority, responsibility.
 Foundation for all other components of control.
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Risk Assessment
 Risk assessment is the
identification and analysis of
relevant risks to achieving the
entity’s objectives - forming the
basis for determining control
activities.
Page 17
COSO – A Framework for Internal Control Financial Reporting…….
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
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Primary Areas of Focus
 …….after analysing Risk and determining the Control Environment
 Control Activities
–
Completion of the documenting of internal controls
–
Testing and implementing internal controls
–
Sustaining internal control implementations
–
Implementation of system based controls
 Information and Communication
–
Financial Reporting from one database
–
Timely distribution of information
 Monitoring
–
Timely review of reports
–
Internal audit function
–
Proactive notification of material events
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An accountability structure for Sec. 404 compliance
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
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Internal Controls at every level in the business
Business
Hierarchy
Company/Group
Supported by
Systems and Software
Business Strategy & Policies
IT Infrastructure;
Business Processes
Integrated Application Software
Responsible
Board of Directors;
CEO; CFO; CIO
CIO; Process Owners
Operational Plans & Budgets
Accounting
Transactions
Integrated Financial Modules
Financial Statements
Periodic Accounting Process
Job Instructions
Process Owners;
CFO; CIO; Controller;
Users
CFO; CIO; Analysts
Integrated Reporting Tools
Monitoring and
Auditing
Testing and Validation
Proof of Control
Shareholders; Board;
CFO;
Auditors
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
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System Access is controlled
First level.
Log-on network
-User id
-Password/fingerprints
Copyright © 2008. Lawson Software. Presentation GAM3 2008
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Enterprise Level Controls……………
 The term “entity-level controls” as used in this document describes aspects of a
system of internal control that have a pervasive effect on the entity’s system of
internal control such as:
 controls related to the control environment
–
for example, management’s philosophy and operating style, integrity and ethical
values; board or audit committee oversight; and assignment of authority and
responsibility
 controls over management override
 the company's risk assessment process
 centralized processing and controls, including shared service environments;
 controls to monitor results of operations
 controls to monitor other controls, including
–
activities of the internal audit function
–
the audit committee, and
–
self-assessment programs;
 controls over the period-end financial reporting process; and policies that
address significant business control and risk management practices. The terms
“company-level” and “entity-wide” are also commonly used to describe these
controls.
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 23
System Foundation Suite
 Ensures and manages the essential applications and functions necessary to run,
operate and secure the M3 Enterprise Management System.
 Combines an industry standard, open run-time environment with tools for managing
deployment, security and performance for all M3 Applications.
 Modules Include:- Application Foundation, Workplace Foundation, Web Application
Foundation
“Java-based solutions like M3 score
very high with respect to openness
transparency and platform
independence.”
Jürgen Schmitt - PEPPERL+FUCHS
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 24
System Foundation Suite
 Application Foundation
–
Contains central supporting application functions, security and features that
operate and ensure the management of the M3 Product Line.
–
The framework the underlying foundation for M3 applications and modules.
 Workplace Foundation
–
Provides the underlying foundation to enable Workplace portal with
configuration, layout and access functionality
 Web Application Foundation
–
Platform for M3 modules for web user interface, integration, tools and
e-Commerce.
–
Provides a rich web application deployment environment, and ensures
mission critical support and allows companies to enable new innovations.
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 25
The M3 Application Foundation
Modules
Solutions
 M3 Foundation
 M3 Foundation contains central supporting
application functions, security and features that
operate and ensure the M3 Enterprise
Management System.
–
Security Management
–
Field Audit Trail
–
Job Scheduler
–
Output Management
 Environment Manager
 It is a well crafted framework that is the underlying
foundation for M3 applications and component
groups.
M3 Business Engine + M3 Workplace
Signature Features
`
Client Tier
Web Application Tier
Application Server Tier
Database Tier
Web User
Web Server
Application Server
Database Server
Browser
HTTP Server
Business Logic
Transaction DB
IBM WebSphere
Workplace
Power User
Web pages
Application
Components
Servlet Container
Foundation
Business
Transactions
 Highly scalable
 Reliable processes management
IBM WebSphere
Supply Chain Mgmt
Online Status UI
Services
Work Load
Services
Enterprise Performace
Monitoring Services
(SNMP)
Report Generator
Security Policy
Services
Transaction
Services (MDB)
Analytic DB
Analytical
Planning
DB
Reports
 Secure and traceable
Directory
Service
Administrator
Message Services
Environment Mgmt
Server Viewer
Integration Services
Memory
resident
LDAP
Content
Mgmt DB
Mobile
DB
Web Services
Web Administration
Services
API Integration
Service
User Administration
Unstructured
Application Servlets
Perasive
Output Mgmt
Security & Audit Trail
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 26
M3 Financials and Compliance
Introduction –
Company…..
Business Processes….
Accounting Transactions……
Financial Reporting….…
Audit Trail…..
Summary
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 27
Internal Controls at every level in the business
Supported by
Business
Hierarchy
Systems and Software
Company/Group
Business Strategy & Policies
M3 Foundation
IT Infrastructure;
M3 Life Cycle
Management
Integrated Application Software
M3 Product Suite
Business Processes
Lawson Product
Operational Plans & Budgets
Accounting
Transactions
Integrated Financial Modules
Financial Statements
Periodic Accounting Process
M3 Report Writer
Integrated Reporting Tools
LBI for M3
Testing and Validation
Field Audit Trail
Proof of Control
Financial Audit Report
Auditors –
Internal/External
Job Instructions
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
M3 Financial
Applications
Page 28
Access
Second level.
Log-on to M3
-User id
-Password
First level.
Log-on network
-User id
-Password/fingerprints
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 29
Effective Internal Controls – for any business
 It is the responsibility of management to safeguard the assets and
liabilities of the business – so its normal part of business life
 It is also the management's job to maintain a system of internal controls
over the financial reporting process to ensure that the financial
statements will be reliable.
 The objective of internal control over financial reporting (“ICFR”) is to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles
(“GAAP”).
 The purpose of the evaluation of ICFR is to provide management with a
reasonable basis for its annual assessment as to whether any material
weaknesses in ICFR exist as of the end of the fiscal year.
Copyright © 2008. Lawson Software. Presentation GAM3 2008
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Effective Internal Controls – Two Basic Questions
 1) Do my employees understand what they need to do to properly
prepare external financial reports?
 2) What information do I need to make sure they have done those
things?
 The SEC's new management guidance suggests considering these two
fundamental questions in three steps.
–
Step 1 - Identify Financial Reporting Risks and the Controls that address
them.
–
Step 2 – Do your Controls work in practice?
–
Step 3 – Reporting your conclusions on overall effectiveness and
deficiencies.
–
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
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Overall
Finance Function
Transaction
Management
Business
Functions
Processes
Sub
Processes
Purchase to Pay
Order to Cash
Business Support
Hire to Retire
Business Risk
Record to Report
Details
Process Controls and Business Transactions
Systems and Tools for checking and validation
Development of People within the Processes
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 32
Access
Third level.
Access to function in M3
Second level.
Log-on to M3
-User id
-Password
First level.
Log-on network
-User id
-Password/fingerprints
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
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Overall
Finance Function
Transaction
Management
Business
Functions
Purchase to Pay
Processes
Procurement
Accounts Payable
Order to Cash
Business Support
Hire to Retire
Business Risk
Record to Report
Travel &
Entertainment
Accounting
Sub-Process Controls and Business Transactions
Sub-systems and Tools for checking and validation
Development of People within the Process and sub processes
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
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Example: Accounts Payable Process
Control
Objective
Completeness
Risk
Material
transaction
not recorded
Control
Activity
Accrual of
open liabilities
Invoices accrued
after closing
Issue: Invoices go to field and AP is not aware of liability.
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
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Evaluation and Assessment of the ICFR…..
 Identifying Financial Reporting Risks and Controls
–
a. Identifying Financial Reporting Risks
–
b. Identifying Controls that Adequately Address Financial Reporting Risks
–
c. Consideration of Entity-Level Controls
–
d. Role of Information Technology General Controls
–
e. Evidential Matter to Support the Assessment
 Evaluating Evidence of the Operating Effectiveness of ICFR
–
a. Determining the Evidence Needed to Support the Assessment
–
b. Implementing Procedures to Evaluate Evidence of the Operation of ICFR
–
c. Evidential Matter to Support the Assessment
 Multiple Location Considerations
–
Same country or different countries
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 36
Here is my Balance Sheet … where is the Risk ?
BALANCE SHEET at 31 December 2007
Assets
2007
2006
187,654
85,987
4,984
176,554
83,898
4,980
45,909
1,083
45,909
44,798
416,324
49,311
987
41,790
39,002
396,522
250,000
45,789
250,000
37,890
86,088
72,577
7,911
3,456
23,080
416,324
6,468
2,585
27,002
396,522
Fixed assets
Buildings
Machines
Financial assets
Current assets
Inventory
Other short term investments
Accounts Receivable
Cash and bank
Total assets
Debts and Liabilities
Own capital
Share holders
Acc profits
Long term debts
Loans
Short term debts
Other short term debts
Tax debts
Accounts payable
Total debts and liabilities
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 37
Financial Reporting Risks and their related Controls.
 Key is knowledge of your business
 As applied to the generally accepted accounting principles that apply to your
financial reporting
 Risk factors inherent in your business, both internal and external
 Risks in the way you authorize, process and record transactions that are reflected
in the financial statements.
 Your company's vulnerability to fraud
 How do your entity-level controls relate to financial reporting elements?
–
With what level of precision do they operate?
–
Is there more than one control that addresses the same financial reporting risk?
 If so, which one provides the most efficient way for you to evaluate how well it
works?
 Is the control automated?
–
If so, how sturdy are the relevant IT controls?
 Or is the control manual –
–
If so, what is the risk of human error?
 NOT every control within a particular process needs to be identified
–
only those that adequately address financial reporting risks
Copyright © 2008. Lawson Software. Presentation GAM3 2008
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Minimizing Risk in Financial Reporting
 Incorrect numbers or values
–
Profits under or over stated by a material amount
–
Liabilities under stated by a material amount
–
Assets over stated by a material amount
 Incorrect presentation of accounts
–
Impairment adjustments not charged to reserves
–
Incorrect reporting framework – IFRS v US GAAP
 Numbers or values are misinterpreted
 Errors in assumptions made in preparing numbers/values
 Analysis of data used incorrect/flawed
Copyright © 2008. Lawson Software. Presentation GAM3 2008
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How much evidence is needed ?
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 40
Reporting if the Internal Controls are working …
 1. Evaluation of Control Deficiencies
 2. Expression of Assessment of Effectiveness of ICFR by Management
 3. Disclosures about Material Weaknesses
 4. Impact of a Restatement of Previously Issued Financial Statements
on Management’s Report on ICFR
 5. Inability to Assess Certain Aspects of ICFR
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 41
M3 Financials and Compliance
Introduction –
Company…..
Business Processes….
Accounting Transactions……
Financial Reporting….…
Audit Trail…..
Summary
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 42
Internal Controls at every level in the business
Supported by
Business
Hierarchy
Systems and Software
Company/Group
Business Strategy & Policies
M3 Foundation
IT Infrastructure;
M3 Life Cycle
Management
Integrated Application Software
M3 Product Suite
Business Processes
Lawson Product
Operational Plans & Budgets
Accounting
Transactions
Integrated Financial Modules
Financial Statements
Periodic Accounting Process
M3 Report Writer
Integrated Reporting Tools
LBI for M3
Testing and Validation
Field Audit Trail
Proof of Control
Financial Audit Report
Auditors –
Internal/External
Job Instructions
Copyright © 2008. Lawson Software. Presentation GAM3 2008
M3 Financial
Applications
Page 43
Integrated Business Processes
The order flow
Procurement
S
u
p
p
l
i
e
r
s
Production
planning
Sales &
order
C
u
s
t
o
m
e
r
s
The logistic flow
Receipt
handling
Production
Warehouse/
Distribution
The financial flow
Accounts
payable
General
ledger
Manage the financial flow
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Accounts
receivable
Monitor the performance of other flows
Page 44
Third level.
Access to function in M3
Access
Fourth level.
Access to values
- Customer
- Supplier
- Division
- Cost center
- etc
Second level.
Log-on to M3
-User id
-Password
First level.
Log-on network
-User id
-Password/fingerprints
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 45
Integrated Financial Solution…as presented in Sales
Procurement
Service
Orders
Logistics
Rental
Contracts
Sales
Orders
Maintenance
Orders
Project
Orders
Human
Resources
Fixed
Assets
Time
Recording
Accounts
Payable
General
Ledger
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Accounts
Receivable
Page 46
Integrated Financial Solution…the database schema
Procurement
Fixed
Assets
Service
Orders
Logistics
Rental
Contracts
Maintenance
Orders
Project
Orders
Sales
Orders
FFASMA
CIDMAS
MITMAS
OCUSMA
Fixed Asset
Master
Supplier
Master
Item
Master
Customer
Master File
FCHACC
CBANMA
MPHEAD
SSAGRH
OOHEAD
Chart of
Accounts
Bank
Accounts
Purchase
Orders
Service
Agreements
Customer
Orders
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 47
Accounting and Reporting for - Inventory
CINACC
FCR040
Accounting
For
Logistics
Accounting
Transactions
Daily Processes
1) Inventory Records
Function
MMS901
2) Create Accounting Function
CAS950-956
3) Update GL
CAS960
Function
Update General Ledger
1) Program
GLS040
2) Check
GLS036
3) Inventory Valuation CAS180
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 48
M3 Financial Core File Structure with Update Process
FCR040
Checking
batchtrans
GLS036
FGLEDG
FGLEDX
FPLEDG
FPLEDX
FPLBAL
FSLEDG
FSLEDX
FSLBAL
General
Update
GLS040
FCR050
Update
balancefile
GLS050
FBAKEY
FBAVAL
GLS041PF
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 49
Audit Trail from the GL to the Logistics files
Stock Transaction.
MO Operation.
Display History
Display Transactions
(MWS070)
(PMS095)
MITTRA
MWOPTR
Internal Account
Entry. Create
(CAS950)
Internal Account Entry.
Transfer To FIN
(CAS960)
WO Operation.
Display Transactions
(MOS095)
MMOPTR
CINACC
Internal Account
Entry.Display
(CAS303)
CRACTR
Order Costing. Display/
WO Costing. Display
(CAS310/ CAS305)
CPO…/
CPOCAW
Internal Account Entry.
Open
(CAS300)
FGLEDG
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
General Ledger.
Display Transactions
(GLS210)
Page 50
Accounting and Reporting Flows – Sales Revenues
OINACC
Accounting
Transactions
Daily Processes
1) Invoice Customers Function
OIS180
2) Update Financials
OIS196
Function
FCR040
Accounting
Transactions
3) Create Sales Statistics
Update General Ledger
1) Program
GLS040
2) Check
GLS036
3) Audit Trail
OIS680
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 51
Account Builder… CRS395 ….controls all accounting
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 52
Financial Reporting and Accounting Transaction Flows
General Ledger – A/C 4010
1)INT/TFR 2005-01-31
XXX,XXX.nn
2)INT/TFR 2005-06-24
X,XXX.nn
3)INV/ADJ 2005-12-31
XX,XXX.nn
Accounting Setups
1)OI20-971
DIM1
4010
2) OI20-971
DIM1
4010
3) CA60-910
DIM1
1410
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 53
Financial Reporting – The Process Flow
Report Writer
1) Sales
EUR X,XXX,XXX,XXX
2) COGS
EUR Y,YYY,YYY,YYY
3) EBIT
EUR
X,XXX,XXX
On-Line Reporting
GL Balances – Period 200512
1) A/C 4010
X,XXX,XXX,XXX
2) A/C 4020
X,XXX,XXX
3) A/C 4030
X,XXX,XXX
The GL Balance File
General Ledger – A/C 4010
1)INT/TFR 2005-01-31
XXX,XXX.nn
2)INT/TFR 2005-06-24
X,XXX.nn
3)INV/ADJ 2005-12-31
XX,XXX.nn
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 54
M3 Financials and Compliance
Introduction –
Company…..
Business Processes….
Accounting Transactions……
Financial Reporting….…
Audit Trail…..
Summary
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 55
Internal Controls at every level in the business
Supported by
Business
Hierarchy
Systems and Software
Company/Group
Business Strategy & Policies
M3 Foundation
IT Infrastructure;
M3 Life Cycle
Management
Integrated Application Software
M3 Product Suite
Business Processes
Lawson Product
Operational Plans & Budgets
Accounting
Transactions
Integrated Financial Modules
Financial Statements
Periodic Accounting Process
M3 Report Writer
Integrated Reporting Tools
LBI for M3
Testing and Validation
Field Audit Trail
Proof of Control
Financial Audit Report
Auditors –
Internal/External
Job Instructions
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
M3 Financial
Applications
Page 56
Business Reporting Supply Chain
Processes
Business
Operations
Internal
Financial
Reporting
External
Financial
Reporting
Financial
Publishers
and Data
Aggregators
Companies
Participants
Trading
Partners
Investment
and Lending
Analysis
Management
Accountants
Auditors
Investors
Regulators
Software Vendors
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 57
Internal Controls over the Process of Financial Reporting
 The process is designed and maintained by the management of a
company to provide “reasonable” assurance about the reliability of
financial reporting.
–
External customers
–
Internal customers
 Effective internal control over financial reporting is vital to the proper
recording of base accounting transactions and the preparation of
reliable financial reports.
 Such a control process has to be comprehensive and will involve
employees at all levels (and all locations) throughout a company. It will
include those who keep accounting records, prepare and disseminate
accounting policies, and monitor systems, as well as people working in
a variety of operating roles.
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 58
Financial Reporting – The Process Flow
Statutory accounts
1)Turnover EUR XXX,XXX,XXX
2) EBIT
EUR
X,XXX,XXX
3) EPS
EUR
XXX.YY
On-Line Reporting
Report Writer
1) Sales
EUR X,XXX,XXX,XXX
2) COGS
EUR Y,YYY,YYY,YYY
3) EBIT
EUR
X,XXX,XXX
The GL Balance File
GL Balances – Period 200512
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
1) A/C 4010
X,XXX,XXX,XXX
2) A/C 4020
X,XXX,XXX
3) A/C 4030
X,XXX,XXX
Page 59
Profit and Loss – Pro-Forma
This Year
Last Year
Turnover
xxx,xxx,xxx
xxx,xxx,xxx
Cost of Sales
xxx,xxx,xxx
xxx,xxx,xxx
Gross Profit/Loss
Other Operating Costs
Operating Profit/Loss
Financial Income/Expenses
Profit before Tax
Taxation
Profit after Tax
xx,xxx,xxx
xx,xxx,xxx
xx,xxx,xxx
xx,xxx,xxx
xx,xxx,xxx
xx,xxx,xxx
xx,xxx,xxx
xx,xxx,xxx
xx,xxx,xxx
xx,xxx,xxx
xx,xxx,xxx
xx,xxx,xxx
xx,xxx,xxx
xx,xxx,xxx
IAS
1; 11; 16;
17; 18; 36
23;
16; 17; 36
12;
M3 Module – RGR for Financial Reporting
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 60
Text
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 61
My numbers are correct … where is the Risk ?
BALANCE SHEET at 31 December 2007
Assets
2007
2006
187,654
85,987
4,984
176,554
83,898
4,980
45,909
1,083
45,909
44,798
416,324
49,311
987
41,790
39,002
396,522
250,000
45,789
250,000
37,890
86,088
72,577
7,911
3,456
23,080
416,324
6,468
2,585
27,002
396,522
Fixed assets
Buildings
Machines
Financial assets
Current assets
Inventory
Other short term investments
Accounts Receivable
Cash and bank
Total assets
Debts and Liabilities
Own capital
Share holders
Acc profits
Long term debts
Loans
Short term debts
Other short term debts
Tax debts
Accounts payable
Total debts and liabilities
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 62
Assets
2003
2002
187 654
85 987
4 984
176 554
83 898
4 980
45 909
1 083
45 909
44 798
416 324
49 311
987
41 790
39 002
396 522
250 000
45 789
250 000
37 890
Inventory and WIP
Fixed assets
Buildings
Machines
Financial assets
Current assets
Inventory
Other short term investments
Accounts Receivable
Cash and bank
Total assets
Debts and Liabilities
Own capital
Share holders
Acc profits
By:
Long term debts
Loans
86 088
72 577
7 911
3 456
23 080
416 324
6 468
2 585
27 002
396 522
Short term debts
Other short term debts
Tax debts
Accounts payable
Total debts and liabilities
• Warehouse
• Product Group
• Location
• Ageing
• etc
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 63
Finance – Inventory or Stock Valuation
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 64
Assets
2003
2002
187 654
85 987
4 984
176 554
83 898
4 980
45 909
1 083
45 909
44 798
416 324
49 311
987
41 790
39 002
396 522
Fixed assets
Buildings
Machines
Financial assets
Current assets
Inventory
Other short term investments
Accounts Receivable
Cash and bank
Total assets
Debts and Liabilities
Accounts Receivable
25000
20000
15000
10000
5000
0
Own capital
Share holders
Acc profits
250 000
45 789
Not
due
250 000
37 890
1-5 6-15 16-30 31-60 61-90 >90
days days days days days days
By:
Long term debts
Loans
86 088
72 577
7 911
3 456
23 080
416 324
6 468
2 585
27 002
396 522
Short term debts
Other short term debts
Tax debts
Accounts payable
Total debts and liabilities
• geography/country
• customer type
• currency
• ageing/forecast
• business segment
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 65
Finance – DSO Days Sales Outstanding
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 66
Finance – Exception report top Overdue customers
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 67
M3 Financials and Compliance
Introduction –
Company…..
Business Processes….
Accounting Transactions……
Financial Reporting….…
Audit Trail…..
Summary
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 68
Internal Controls at every level in the business
Supported by
Business
Hierarchy
Systems and Software
Company/Group
Business Strategy & Policies
M3 Foundation
IT Infrastructure;
M3 Life Cycle
Management
Integrated Application Software
M3 Product Suite
Business Processes
Lawson Product
Operational Plans & Budgets
Accounting
Transactions
Integrated Financial Modules
Financial Statements
Periodic Accounting Process
M3 Report Writer
Integrated Reporting Tools
LBI for M3
Testing and Validation
Field Audit Trail
Proof of Control
Electronic Signatures
Auditors –
Internal/External
Job Instructions
M3 Financial
Applications
Financial Audit Report
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 69
Implementing Compliance in Movex
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 70
Master Files and Field Audit Trail (FAT)
Several laws, compliance
rules require that
important files can be
monitored regarding
changed items, new
items and deleted items.
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 71
Field Audit Trail – FAT Enhanced
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 72
Re-design of Field Audit Trail – FAT Enhanced
1.Start FAT manager.
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 73
Field Audit Trail – FAT Enhanced
1.We want to audit the MSRESP field. Select the MSRESP field.
The fields are listed in alphabetical order.
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 74
New Role Based Security – SES400….replaces SES003..
Copyright © 2008. Lawson Software. Presentation GAM3 2008
13/04/2015
Page 75
SES401 – Connects Users and Functions (via Roles)
Copyright © 2008. Lawson Software. Presentation GAM3 2008
13/04/2015
Page 76
MNS410 Connects Users to their Process Roles…
Copyright © 2008. Lawson Software. Presentation GAM3 2008
13/04/2015
Page 77
Text nnnnn
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 78
Text nnnnn
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 79
Enable Lawson Document Archive as a shortcut
•The electronic images are automatically stored and
indexed into the Lawson Document Archive solution
•You can enable this as a short-cut onto your desktop
Copyright © 2008. Lawson Software. Presentation GAM3 2008
13/04/2015
Page 80
•You can search for document by a variety of criteria
The PDF documentation of the change is stored in DAF
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 81
Text nnnnn
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 82
From the Document Archive
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 83
Page 1 of 2 – the signature of person making change
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 84
Page 2 of 2 – the details of the change recorded…….
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 85
M3 Audit & Reconciliation Reports – 1 of 2
 Already available….
–
APS500 – Accounts Payable listing
–
ARS500 – Accounts Receivable listing
–
APS580 – Goods Received Not Invoiced
–
CAS515 – Inter Division Delivered to….
–
CAS520 – Inter Division Received by….
–
CAS530 – Inventory Reconciliation
–
GLS218 – GL Balance File – on-line Audit Trail
–
GLS940 – GL Balance File Analysis and Verification
–
GLS960 – Voucher Number Check
–
GLS965 – Journal Number Check
–
GLS970 – Transaction File Check
–
GLS975 – Voucher Balance Check
–
GLS980 – GL Balance File Audit Report
 Include these reports on the Job Scheduler…??…
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 86
Other audit trails – proving financials – 2 of 2
 Delivered with Heart Beat 200805 delivery…..
–
GLS940 – GL Balance File Analysis and Verification ….
 Details to follow – ATE-13.1 Environment
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 87
GLR - Balance File Analysis…GLS940….
Copyright © 2008. Lawson Software. Presentation GAM3 2008
13/04/2015
Page 88
M3 Financials and Compliance
Introduction –
Company…..
Business Processes….
Accounting Transactions……
Financial Reporting….…
Audit Trail…..
Summary
Copyright © 2008. Lawson Software. Presentation GAM3 2008
Page 89
Compliance is always about people and systems
By itself… software can never make a company compliant!
Compliance
Certificate
It is your company processes and the way they are used that are compliant
Our ambition is that M3 Applications can support your efforts to be compliant
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 90
Financial Compliance – The metaphor 1 of 2
Lawson would like to deliver a half-filled binder......or Database.
Table of Contents
1. Accounting plan
1. Chart of account and accounting setups
2. Accounting instructions
2. Storage plan and information flows
1. Data base model over financial areas
2. Graphic overview over the financial system
3. Information flows
4. Verification chains
5. Archiving plans
3. Business processes
1. Daily activities
2. Period activities
3. Year end activities
4. Process for interim financial reporting
5. Process for annual finacial reporting
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 91
Financial Compliance – The metaphor – 2 of 2
4. Organizational Rules & Procedures
1. Authorization of supplier invoices
2. Organization for interim reporting
3. Organization for annual reporting
5. Software log
1. Used software – installed log
2. Implemented changes
3. Audit log - descriptions
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 92
Core Ledger Update Financial Structure
FCR040
Checking
batchtrans
GLS036
FGLEDG
FGLEDX
FPLEDG
FPLEDX
FSLEDG
FSLEDX
General
Update
GLS040
FCR050
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 93
Supporting Documentation
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 94
Financial Processes supported by M3 Functions…
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 95
Internal Controls at every level in the business
Supported by
Business
Hierarchy
Systems and Software
Company/Group
Business Strategy & Policies
M3 Foundation
IT Infrastructure;
M3 Life Cycle
Management
Integrated Application Software
M3 Product Suite
Business Processes
Lawson Product
Operational Plans & Budgets
Accounting
Transactions
Integrated Financial Modules
Financial Statements
Periodic Accounting Process
M3 Report Writer
Integrated Reporting Tools
LBI for M3
Testing and Validation
Field Audit Trail
Proof of Control
Financial Audit Report
Auditors –
Internal/External
Job Instructions
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
M3 Financial
Applications
Page 96
Simpler is Better
Copyright © 2008. Lawson Software. Presentation GAM3 2008.
Page 97
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