Importance Of GRC
- The Internal Audit profession is in a state of transformation hence we should embrace Smarter Faster and Better ways of performing Audit.
- With companies adopting complex ERPs and IT enabled services, it’s critical to develop a way to sustain newly designed processes and controls.
- In addition to control rationalization and improving control process efficiency, further automation of controls can reduce the number of worker hours required to operate and test those controls.
- By developing a centralized multi-compliance framework (across Legal, HR, IT, and Finance functions), you can reduce planning oversight, reporting, testing, and overall compliance management, as well as lower the costs of operating controls across an organization.
- Often, internal and external audit contain duplicative efforts. Having a centralized control platform with Process Controls allows you to integrate internal and external audit activities and simplify the procedures.
- It keeps the organisation on track
- Removes redundancy in the organisation
Directors have to issue Directors’ Responsibility Statement u/s 134(5) under companies Act, 2013 that:
- In Annual Accounts, the applicable accounting standard has been followed along with explanation for material departures
- That such policies are applied consistently and directors made judgment that are reasonable
- Proper record kept to prevent/ detect fraud/ irregularities
- Internal financial controls have been laid down that are adequate and are operating effectively
- Proper systems to ensure compliance of all applicable laws and that such systems are adequate and are operating effectively
- Done properly, GRC creates a central nervous system that helps you manage your business more effectively.
- Compliance costs can be reduced by up to 90%, so creating a competitive advantage.
- Case sensitive risk assessment increases revenues (fine grained judgments: every customer is a unique case)
- Total insight and overview by using one single, integral framework (management is in control)
- Compliance is an asset of the organization; i.e. being compliant can be used as a brand differentiator (compare with “being green” in relation to sustainability)
- GRC as a Service (use external services from expert companies rather than doing it all yourself: intelligent outsourcing).