Managing Risk and Compliance is a very important aspect for every organization, depending upon the area in which organization operates, it must mandatorily abide by certain Regulatory and Compliance Requirements at various levels such as Country specific, International Regulations etc.
To comply to these Regulations, Organizations will have set of Policies and Controls in place.Timely evaluation of the effectiveness and adequacy of these Controls will be of utmost importance to ensure Organization is compliant to the requirements and safeguard against huge penalties enforced for non-compliance.
In addition to these non-compliance risks, every organization is required to manage enterprise-wide risks related to finance, operations, strategy etc. Many organizations still follow a siloed approach in managing their risk and compliance. It will create many challenges for the audits, both internal and external and many issues may be reported because of these gaps and silo approaches in Risk and Compliance departments.
To address all these challenges, SAP has used the concept of 3 Lines of Defence leveraging three interesting solutions such as
1.SAP Process Controls
2.SAP Risk Management and
3.SAP Audit Management
SAP Risk Management is used to manage all the enterprise level risks which is at the first level of defence then SAP Process Controls will be used to manage all the Controls required to meet the country specific, regulatory/compliance requirements and as the mitigation/response mechanism for the enterprise risks which is a second level defence. SAP Risk Management will be used to define, analyse, and assess all the enterprise risks and Process Controls to perform the design assessments and test of effectiveness for manual, semi-automated and automated controls in the Organization. The outcomes of these two solutions will be used at the third level of defence which is Independent Assurance or Internal Audit using a solution called SAP Audit Management, it can be used to run the entire life cycle of the Internal Audits starting from Planning an Audit to the Audit Follow-up.
These three solutions also work in integration which is a great benefit, all three solutions can use the same Organization Hierarchy, which simplifies the reporting. Controls managed in SAP Process Controls will be used as a response for the Risks Managed in SAP Risk Management. These Controls and Risks along with the assessments and tests will be leveraged to perform the risk-based Audits on SAP Audit Management System. Findings created as part of the audit execution in SAP Audit Management can also be reported as Enterprise Risks back in SAP Risk Management Solution.
The following diagram describes the integration between these solutions and what all objects are involved in the integration of these solutions.
These three solutions used in integration will enhance the overall efficiency of the Risk and Compliance departments and helps to conduct internal audits fully risk based with much less efforts to complete the same.
To comply to these Regulations, Organizations will have set of Policies and Controls in place.Timely evaluation of the effectiveness and adequacy of these Controls will be of utmost importance to ensure Organization is compliant to the requirements and safeguard against huge penalties enforced for non-compliance.
In addition to these non-compliance risks, every organization is required to manage enterprise-wide risks related to finance, operations, strategy etc. Many organizations still follow a siloed approach in managing their risk and compliance. It will create many challenges for the audits, both internal and external and many issues may be reported because of these gaps and silo approaches in Risk and Compliance departments.
To address all these challenges, SAP has used the concept of 3 Lines of Defence leveraging three interesting solutions such as
1.SAP Process Controls
2.SAP Risk Management and
3.SAP Audit Management
SAP Risk Management is used to manage all the enterprise level risks which is at the first level of defence then SAP Process Controls will be used to manage all the Controls required to meet the country specific, regulatory/compliance requirements and as the mitigation/response mechanism for the enterprise risks which is a second level defence. SAP Risk Management will be used to define, analyse, and assess all the enterprise risks and Process Controls to perform the design assessments and test of effectiveness for manual, semi-automated and automated controls in the Organization. The outcomes of these two solutions will be used at the third level of defence which is Independent Assurance or Internal Audit using a solution called SAP Audit Management, it can be used to run the entire life cycle of the Internal Audits starting from Planning an Audit to the Audit Follow-up.
These three solutions also work in integration which is a great benefit, all three solutions can use the same Organization Hierarchy, which simplifies the reporting. Controls managed in SAP Process Controls will be used as a response for the Risks Managed in SAP Risk Management. These Controls and Risks along with the assessments and tests will be leveraged to perform the risk-based Audits on SAP Audit Management System. Findings created as part of the audit execution in SAP Audit Management can also be reported as Enterprise Risks back in SAP Risk Management Solution.
The following diagram describes the integration between these solutions and what all objects are involved in the integration of these solutions.
These three solutions used in integration will enhance the overall efficiency of the Risk and Compliance departments and helps to conduct internal audits fully risk based with much less efforts to complete the same.
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