FINANCIAL STATEMENT RISK ASSESSMENT AND MANAGEMENT SYSTEM AND METHOD
First Claim
1. A method, with an information processing system, for discriminating cash transactions from non-cash transactions for each line item in an external financial reporting statement of an organization, the method comprising:
- reverse tracing, with a processor, one line item in an external financial reporting statement to one or more internal financial systems data of an organization, each of the one or more internal financial systems data comprising at least one account;
segmenting, with a processor, each account in the one or more internal financial systems data by internal transaction codes of the organization that identify those accounts associated with cash receipts and those accounts associated with cash disbursements;
aggregating, with a processor, in a total cash receipts balance, all account balances that are identified as cash receipts of those accounts that are associated with the one line item in an external financial reporting statement by the reverse tracing;
aggregating, with a processor, in a total cash disbursements balance, all account balances that are identified as cash disbursements of those accounts that are associated with the one line item in the external financial reporting statement by the reverse tracing;
calculating, with a processor, a net cash balance associated with the first one line item based on the aggregated total cash disbursements balance and the aggregated total cash receipts balance; and
presenting, with a processor, to a user, via a user interface, the net cash balance associated with the one line item.
1 Assignment
0 Petitions
Accused Products
Abstract
A method, computer readable storage medium, and information processing system analyze sources of internal organization financial information and decisions made that impact the risk of reporting errors in cash and non-cash components in line items of external financial reporting statements such as balance sheets, income statements, and cash flow statements. The information processing system displays to a user, via a user interface, cash and non-cash components of at least one line item of an external financial reporting statement, the internal decisions and judgments made to arrive at the cash and non-cash component amounts, and the risk of reporting errors being introduced in each line item due to these decisions and judgments.
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Citations
23 Claims
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1. A method, with an information processing system, for discriminating cash transactions from non-cash transactions for each line item in an external financial reporting statement of an organization, the method comprising:
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reverse tracing, with a processor, one line item in an external financial reporting statement to one or more internal financial systems data of an organization, each of the one or more internal financial systems data comprising at least one account; segmenting, with a processor, each account in the one or more internal financial systems data by internal transaction codes of the organization that identify those accounts associated with cash receipts and those accounts associated with cash disbursements; aggregating, with a processor, in a total cash receipts balance, all account balances that are identified as cash receipts of those accounts that are associated with the one line item in an external financial reporting statement by the reverse tracing; aggregating, with a processor, in a total cash disbursements balance, all account balances that are identified as cash disbursements of those accounts that are associated with the one line item in the external financial reporting statement by the reverse tracing; calculating, with a processor, a net cash balance associated with the first one line item based on the aggregated total cash disbursements balance and the aggregated total cash receipts balance; and presenting, with a processor, to a user, via a user interface, the net cash balance associated with the one line item. - View Dependent Claims (2, 3)
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4. A method, with an information processing system, for analyzing at least one non-cash valuation, accrual, and estimate, that has a non-cash impact on at least one line item in an external financial reporting statement of an organization, the method comprising:
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identifying, with a processor, at least one Judgment, a Judgment comprising an aggregation of at least one non-cash valuation, accrual, and estimate, for a financial reporting period, and that is used to add to or subtract from cash basis revenues and expenses, to be booked to at least one line item in an external financial reporting statement of an organization; identifying, with a processor, sources of information used in at least one of the Judgment and the calculation of the non-cash result from the Judgment to be booked to the at least one line item in an external financial reporting statement; identifying, with a processor, significant guesses made in, and that have substantial impact on the non-cash result from, the Judgment; defining, with a processor, control steps that ensure that the significant guesses are visible to senior management of the organization, and there is integrity in calculations and assumptions used in calculating the Judgment; identifying, with a processor, metrics that indicate what is an expected non-cash result of calculating the Judgment; defining, with a processor, a set of at least one automated analytical test that supports the validity of each element of the calculation of the non-cash result from the Judgment; calculating, with a processor, one conclusion analytic that defines what is the non-cash result from the calculation of the Judgment; and combines all of the at least one automated analytical test and, based on the combination, provides a risk assessment value that indicates what additional risk is being taken by accepting the non-cash result from the Judgment when booked to the at least one line item in an external financial reporting statement; and providing, with a processor, to a user interface an indication of additional risk being taken by accepting the non-cash result from the Judgment when booked to the at least one line item in an external financial reporting statement. - View Dependent Claims (5, 6, 7, 8, 9, 10, 11, 12)
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13. A method, with an information processing system, for determining an amount of unidentified non-cash balance associated with a line item in an external financial reporting statement of an organization, the method comprising:
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calculating, with a processor, a non-cash balance for each of at least one line item in an external financial reporting statement of an organization, by; subtracting a total cash balance associated with the each one of the at least one line item from a total balance associated with the each one of the at least one line item; and calculating, with a processor, for each of the at least one line item, a known non-cash result from an aggregate of known non-cash valuations, accruals, and estimates, for a financial reporting period, and that are used to add to, or subtract from, cash basis revenues and expenses to be booked to the each of the at least one line item, respectively; subtracting, for each of the at least one line item, a respective calculated known non-cash result from the respective non-cash balance associated with the each one of the at least one line item and thereby providing a respective unidentified non-cash balance associated with the each one of the at least one line item; and providing, with a processor, to a user interface for each of the at least one line item, a value representing the respective unidentified non-cash balance associated with the each one of the at least one line item. - View Dependent Claims (14, 15)
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16. A method, with an information processing system, of defining a set of control steps used in calculating an aggregate of known non-cash valuations, accruals, and estimates that have a non-cash impact on each of at least one line item in an external financial reporting statement of an organization, the method comprising:
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storing in memory, with a processor, a set of control process steps that ensure that significant guesses made in, and that have substantial impact on, calculation of a Judgment, a Judgment comprising a non-cash result from an aggregate of known non-cash valuations, accruals, and estimates, for a financial reporting period, to be booked to at least one line item in an external financial reporting statement of an organization, are visible to management personnel of an organization, and there is integrity in the calculation and assumptions used in calculating the Judgment; for each Judgment; presenting, with a processor, to a user interface, at least one control process step of the set of control process steps associated with a calculation of the respective Judgment; receiving, from the user interface, first user input that indicates whether the presented at least one control process step is acceptable to a user as meeting business needs of the organization; and in response to receiving the first user input that indicates the presented at least one control process step is unacceptable, prompting a user, via the user interface, to enter second user input that at least one of updates, amends, and changes, the presented at least one control process step that is unacceptable to the user. - View Dependent Claims (17, 18, 19, 20, 21)
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22. A computer readable storage medium storing a data structure for use with an information processing system for calculating judgments used to add to or subtract from cash basis revenues and expenses, booked to at least one line item in an external financial reporting statement of an organization, the computer readable medium comprising:
a data structure comprising; a first set of identifiers each identifier representing a Judgment, a Judgment comprising an aggregation of at least one non-cash valuation, accrual, and estimate, for a financial reporting period, and that is calculated to add to or subtract from cash basis revenues and expenses, to be booked to at least one line item in an external financial reporting statement of an organization; and a set of non-cash results, each non-cash result being a result of calculating a respective Judgment from a set of Judgments, and wherein each of the set of non-cash results being associated with a respective each one of the first set of identifiers representing each one of the respective set of Judgments, and wherein the information in the data structure is maintained by the information processing system for providing to a user interface the set of non-cash results and a second set of identifiers representing the respective set of Judgments, each of the set of non-cash results being associated with a respective each one of the second set of identifiers. - View Dependent Claims (23)
Specification