Compliance 360 and MarketWatch have put together a list ofGRC trends that are likely to affect financial reporting in 2012. The full list is extensive, and worth reading, but we will summarize some of the highlights below, along with some of our own thoughts, opinions, and commentary.
“Historically, regulators have been satisfied with companies that have implemented compliance programs, but now they want proof that the programs are actually working.” Regulatory bodies have wised up to the fact that having compliance procedures in place, and those procedures actually functioning, are two separate concepts. Analysts predict that 2012 will bring about data and process distillation, which will test the effectiveness of compliance procedures.
Compliance failures, ethics charges, and public court battles have become common knowledge in recent years, thanks to improving news and communication technology. As more and more consumers become aware of a brand’s compliance issues, board members will become more and more aware of the impact of their GRC actions. Compliance 360 predicts that smart company owners will promote their strong compliance record as part of a branding strategy.
One of the important secondary features of software and languages like XBRL is the staggering amount of data that is collected and organized during compliance processes. Some analysts think that GRC software can be used for the same purpose, resulting in more effective compliance efforts. “From the board down, GRC users need to see trend lines and correlations to identify and address root-cause issues before auditors come calling. As examples, the additional insight corporations can glean by linking training programs to the types of issues received via a whistleblower hotline, or mining various systems to determine how to change audit plans for the next cycle, can be highly valuable.”
XBRL and compliance go hand-in-hand, and it will be important for any in the financial industry to keep an eye on these developing trends. Early actions can get you a few strides ahead in the compliance race.
Merrill Corporation is proud to offer XBRL Complete, a suite of services that meets - and has options to exceed – the mandated requirements for XBRL for mutual funds. For more information, please click here or call 866-367-9110.
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