SOX Compliance with SAP Treasury and Risk Management

Balaji Kumar Alamanda is a certified SAP FICO consultant with 9 years of SAP implementa-tion experience primarily focusing on Corporate Finance Management, Treasury, Manage-ment of Internal Controls ( MIC), Finance & Controlling modules; Certified Public Accountant ( USA); Certified Information Systems Auditor (CISA); MBA ( Information Systems Management); Certified Treasury Professional ( CTP) & Project Management Professional ( PMP ); over 22 years of Treasury, Finance and Financial Systems Implementation Experience with extensive hands on experience in the implementation of SAP - Management of Internal Controls Module. Arjun Krishnan is a Manager FI/CO COE for Fortune 75 Company; platinum level FI / Treasury consultant with 10 years of SAP experience, specializing in Treasury, Cash Management, Electronic Banking, Corporate Finance Management, & Finance modules; Certified Public Accountant (Canada) & Certified Treasury Professional (CTP) with over 25 years of Treasury, Budgeting, Financial Management, Audit & Systems Implementation experience; full cycle project management, configuration, integration, implementation and post-implementation experience; involved in the design, testing, implementation, and monitoring of key Audit, Control and Security issues with special emphasis on SOX requirements.

1 ... Business and Functional Overview ... 23 ... 1.1 ... ERP Treasury Systems: A New Era ... 23 ... 1.2 ... Standalone Workstation or ERP Treasury System ... 24 ... 1.3 ... Key Drivers and Challenges for Treasury Management ... 27 ... 1.4 ... The Sarbanes-Oxley Act of 2002 and its Impact on Treasury Governance and Operations ... 29 ... 1.5 ... SAP ERP Treasury Functionality ... 34 ... 1.6 ... Summary ... 53 2 ... Controls in SAP ERP ... 55 ... 2.1 ... Control Framework and Objectives ... 55 ... 2.2 ... Risk and Internal Control ... 59 ... 2.3 ... Control Mechanisms in SAP ERP ... 61 ... 2.4 ... Summary of Controls in SAP ERP ... 89 ... 2.5 ... Risk/Control Matrix ... 92 ... 2.6 ... Summary ... 94 3 ... Inbound Electronic Banking in SAP ERP ... 95 ... 3.1 ... The Inbound EBS Process Flow ... 95 ... 3.2 ... Banking Structure and Master Data ... 97 ... 3.3 ... Straight Through Processing (STP ... 112 ... 3.4 ... Prior Day Bank Statements ... 122 ... 3.5 ... Bank Reconciliation and Control ... 129 ... 3.6 ... Summary of Controls for Inbound Electronic Banking ... 139 ... 3.7 ... Summary ... 140 4 ... Outbound Electronic Banking in SAP ERP ... 141 ... 4.1 ... Master Data Structure and Controls ... 143 ... 4.2 ... ACH Payments ... 148 ... 4.3 ... Wire Transfers ... 155 ... 4.4 ... The Payment Medium Workbench (PMW ... 166 ... 4.5 ... File Transmission ... 176 ... 4.6 ... Using Workflow to Route Authorizations ... 178 ... 4.7 ... Implementing Outbound Banking in SAP ERP: Lessons Learned ... 179 ... 4.8 ... Summary of Key Controls ... 180 ... 4.9 ... Summary ... 181 5 ... Positive Pay and Payment Card Processing ... 183 ... 5.1 ... Positive Pay ... 183 ... 5.2 ... Lockbox Processing ... 193 ... 5.3 ... Procurement and Credit Card Processing ... 207 ... 5.4 ... Escheatment ... 224 ... 5.5 ... Summary ... 228 6 ... Cash Management & Liquidity Forecasting ... 229 ... 6.1 ... Cash Management ... 230 ... 6.2 ... Reporting ... 256 ... 6.3 ... Controls for Cash Management ... 260 ... 6.4 ... In-House Cash (IHC) Management ... 263 ... 6.5 ... Summary ... 277 7 ... Financial Risk Management: Foreign Exchange and Derivatives ... 279 ... 7.1 ... Master Data for FX Transaction Management ... 282 ... 7.2 ... Master Data for Transaction Processing ... 283 ... 7.3 ... Master Data for Transaction Management ... 289 ... 7.4 ... Master Data for Accounting, Valuation, and Reporting ... 296 ... 7.5 ... Workflow Management ... 297 ... 7.6 ... Transaction Management ... 298 ... 7.7 ... Hedge Management ... 309 ... 7.8 ... Integration with Cash Management ... 317 ... 7.9 ... Market Data Management ... 318 ... 7.10 ... Summary ... 319 8 ... Investment and Debt Management ... 321 ... 8.1 ... Master Data Structure ... 322 ... 8.2 ... Transaction Management ... 330 ... 8.3 ... Market Data Management ... 344 ... 8.4 ... The Analyzers ... 348 ... 8.5 ... Integration with Cash Management ... 361 ... 8.6 ... Reporting ... 362 ... 8.7 ... Summary ... 363 9 ... Tools and Techniques for Internal Controls in SAP ERP ... 365 ... 9.1 ... Management of Internal Controls (MIC ... 366 ... 9.2 ... Audit Information Systems (AIS ... 377 ... 9.3 ... SAP GRC and Other SOX Compliance Systems ... 385 ... 9.4 ... Managing a SOX Audit from the Treasury Perspective ... 386 ... 9.5 ... Reporting, Audit Trail and Documentation ... 392 ... 9.6 ... Summary ... 398 10 ... Special Topics in Treasury Management ... 399 ... 10.1 ... Upgrading SAP ERP ... 399 ... 10.2 ... Archiving ... 417 ... 10.3 ... New Treasury-Related Functionality in SAP ERP ... 427 ... 10.4 ... Summary ... 431 ... 10.5 ... Conclusion ... 431