Accounting information Systems Case Study Analysis
IQVIA Holdings, Inc. is a biotechnology company was found by Dennis Gillings and Gary Koch in 1982, and is headquartered in Durham, North Carolina The number of employees: it has, are 55 000. It is the leading global provider of the contract research services, technology solutions and advanced analytics to the life science industry. The company has most comprehensive as well as largest collection of the healthcare information in the globe,including more than 600 million promotional and prescription data, non-identifiable, comprehensive and longitudinal patient records spanning sales, electronic medical records, medical claims& social media.
Formed through the Merger of IMS Health and Quintiles, IQVIA has become a leading global provider of information, innovative technology solutions and contract research services, focused on helping healthcare clients find better solutions for patients. The company derives most of its revenues in the segment of Technology & Analytics Solutions from a number of information and technology service offerings.
Integration from multiple ERP’s to one ERP Oracle Cloud.
The final phase of the integration of IQVIA worldwide is to integrate per region the various systems ERP systems such as SAP and PeopleSoft to ORACLE Cloud. The Netherlands Branch integration is planned to Q2 and will be finalized in Q3 2020. There are currently two ERP systems in place in the Netherlands. PeopleSoft for the legacy RDS Netherlands B.V. and SAP for the legacy Solutions (Cegedim, Polaris Netherlands B.V., Pilgrim B.V. and IMS Solutions B.V). Until the implementation, the financial data are consolidated in HFM (Hyperion).
The current issue within the business of the Netherlands is the revenue stream. The Netherlands takes most of the costs for costs compared to the revenue. There are many discussions (political) on the accountability of the revenues.
For now, each critical project is assigned to the allocation keys, in order to allocate the revenues to the involved and cooperating countries (profit centers) of the projects.
However, the Sales-to-Cash faces some challenges within the company, including the Netherlands.
The Netherlands is the main contractor with the customer for several projects, which are executed abroad. The invoicing occurs by the country finance teams. The Netherlands is accountable reporting wise. The NEMEA head office in London, analyses the Details Sales Orders (DSO) per country.
As such, the current AIS issue would relate to the Sales-to-cash process. Taking under consideration the current changes in the current AIS due to the ERP change (integration and implementation); the finance teams needs to ensure that whether or not the Sales to Cash process will be at risk. The order to cash is the most important process for the company, which is related to the revenues in the P&L. Cash is king and the shareholders keep a close eye on the cash flows each quarter.
How is the completeness of the revenue recognition secured in the changed Accounting Information Systems?
The main sub-process to focus on, is the Sales to Cash:
The current identified risks are as follows:
- Inaccurate or invalid master data.
- Loss, alteration, or unauthorized disclosure of data.
- Billing errors.
- Unauthorized disclosure of sensitive information.
- Increase of overdue and write-offs.
- Poor performance candamage the customer relations and reducesthe profitability.
Access to information
After the month end close and the reporting the period of February 2020, between 12 March and 26 March; I have scheduled talks with the ERP integration project team, finance director IQVIA Netherlands B.V. and the finance team (3 FTEs) to retrieve information for the situation (IST) and to discuss the risk analysis with the finance director IQVIA Netherlands B.V.
Section 2: Description IST situation
Description of the control environment
TheIQVIA Holdings is an active company that has audit committee, riskcommittee, internal control and a governing board. There are various employees who are competentlyworking on their jobs in order to accomplish the organizational objectives. There are various internalcontrols that the company uses which includes segregation ofduties and computerized financial records. The internal control of the company over the financial reporting includes various procedures and policies, which have been designed to provide the reasonable assurance that the transactions are fairly and accurately recorded as necessary to permit the reparation of the financial statement in accordance with the GAAP (generally accepted accounting principles)and the expenditures and the receipts of the company are being made in accordance with the authorization of the directors and the management of the company. The internal controls over the financial reporting of the company helps the company in reducing the risk of the asset loss, material misstatement and provides the reasonable assurance regarding the accuracy and the reliability of the financial statements of the company. The internal control over the financial reporting of the company is based on the number of audits which are conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”). The standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) require that the company need to plan and perform the audit for the purpose of obtaining the reasonable assurance about whether the financial statements of the company are in accordance with the GAAP (generally accepted accounting principles) and whether the financial statements of the company are free of any error or material misstatement whether because of the fraud or error & whether effective internal control was maintained in each and every material aspect.
As such, the audit of the financial statements of the company involves performing procedures in order to assess and evaluate the materialmisstatement risks of the financial statements of the company whether because of the fraud or error and performing the procedures that tends to respond to those threats or risk of material misstatement. The procedures includes examining and assessing the evidence with regard to the disclosure and amount in the consolidated financial statementon the test basis. Not only this, the audit of the company also includes evaluating and assessing the accounting principles used as well as the significant estimation which are made by the company’s management as well as evaluating and assessing the overall presentation of the consolidated financial statement of the company. The audit of the internal controls over the financial reporting of the company includes obtaining in-depth knowledge and understanding of the internal control over financial reporting, evaluating the operating and design effectiveness of the internal control on the basis of the assessed risk and evaluating the risk that a material weakness exists.
Since there are various weaknesses in the internal control ofthe company, the report illustrates the steps of measuring the effectiveness of the internal control andrecommending the course of action to address the internal control weaknesses. In addition, it address theissues which have arisen within a company related to the product quality, specification and oversupply.
The company tends to intensify the regulatory scrutiny as well as increase the international outsourced manufacturing. SmartSolve® was created by IQVIA Holdings as it is the fully integrated software solution that tends to consolidate the complicated and complex quality management responsibilities into one platform. It is pertinent to note that the SmartSolve® is the cloud based solution which has been designed with the consideration of addressing the all facets of the quality compliance management needs of Life ScienceCompany including supplier management, clinical trials distribution and manufacturing.
In addition to this, the enterprise quality management of the company that is SmartSolve® offers variety of services to the company which included simplified reporting, increased visibility across the value chain of the company, enhanced document management and easier preparation of the audit. Additionally, it fully connect and automate all the process which are associated with the Good Laboratory Practices (GLP), Good Clinical Practices (GCP) as well as Good Manufacturing Practices (GMP)regulationsenables the faster resolution of issue, better decision making as well as improved compliance. The company with its enterprise quality management platform solutions (EQMS), support and local domain expertise allows it to drivecontinuous efficiencies and improvements, better assess potential risk, ongoing quality processes within its fast growing international business operations.Furthermore, the enterprise quality management platform solutions (EQMS) and SmartSolve® suits are the prime example of the purpose built solutions that the company has focused on meeting the needs of the customers and clients working in the highly regulated market in which the degree of the compliance and quality of each and every internal process tends to have far reaching consequences and implications for the growth in the forthcoming years (IQVIA, 2018).
In addition to this, on account of the global nature of the business as well as the reliance of the company over the information system for the purpose of providing the high quality services to its customers, the company has intended to increase the use of the integrated information system such as web-enabled systems in delivering the services to the customers.
Furthermore, the company has significantly increased the use of the web-enabled as well as other integrated information system for delivering its services because of the global nature of the business and the dependence of the company on the information systems for providing its valuable services to the customers. In addition, the failure by the company’s computer environment for providing the sufficient network or processing capacity for data transfer could result in the interruption in delivering the services to the customers. Also, if there is a delay in the information or data delivery, the company would be obliged to transfer the operations of the collection of data to the server hostingservices provider.This transfer of the operations of the collection of data to the server hosting services provider could lead to the significant delays in in the ability of the company to deliver the services and increase in the costs. Not only this, the inadequate or poor performance of the upgraded or new system once completed a d the significant delays in the enhancement of the system could harm or damage the business and its reputation as a whole.
In addition to this, the dependence of the company on the security of the communication system or the computer infrastructure helps the company to protect from the unauthorized access and cyberattacks. The cyberattacks could involve hacking, computerviruses, malware, or other significant disruption of the communication, computer or other related systems. Despite the relentless efforts of the company to ensure the system integrity, the cyber threats keeps evolving and growing with the passage of time and become more difficult and challenging to detect as well as defend against. The company has been using certain techniques and methods for the purpose of obtaining the unauthorized access, degrade or disable service, introduce malicious software and introduce sabotage system in order to remain dormant until the trigging event. Additionally, if the company fails or become incapable to anticipate the methods or effectively implementing the adequate preventive measures as the techniques might frequently changes and are not recognized until they are introduced and because the cyber-attacks would tends to be originate from the several sources,
Additionally, the company has been engaged in providing access to the similar information system to its various customers or clients with connection with the services the company offers to its customers. Since the complexity and the breadth of the information system of the IQVIA Holdings continues to increase, there is a likelihood that the company could be exposed to numerous risk inherent in the integration development as well as ongoing operations of the evolving information system such as;
- The disruption and the failure of the telecommunication facilities, data centers as well as other key infrastructure platform.
- The cyberattacks on, security breaches of as well as other malfunction and failures in the critical applications system of the company on its relatedhardware and
- The excessive days, excessive costs or other deficiencies in the deployment and development of the information system.
The materialization of the aforementioned risk could impede the delivery of service ad database, processing of data and the day to day management of the operations of the business & could lead to the unauthorized disclosure or loss of proprietary, corruption and loss of other valuable information and confidential data.Over the period of time, there are manyhealthcaresystem around the globe which have focused on the digitalizing medical records while these records could theoretically improve the access to the information or data, the relevant data or information is often unstructured, unintegrated, entered inconsistently and siloed in disparate software system. Not only this, the new sources of the information or data such as internet or social media on limited patient pools & information resulting from improved diagnostic technologies has been creating as well as exploring new and uniquesource of the data.
Another effective quality control is the segregation of duties in which each and every employee atworkplace is entitled to complete his work with no biasness stemming from the overlapping of the workdone at different organizational levels. It would most likely improve the internal control environment andorganizations’ risk management, and it would help the company in preventing or reducing the exposure torisks, errors, frauds and various other failures in company’s internal control. Shortly stating, thesegregation of duties in accounting department would mitigate the risk of an internal fraud(CLARKE, 2017).
It is significantly important to note that the computerized financial records is another internalsystem that tends to generate invoices, and the invoices are raised when the total delivered quantity isinputted and the stock code is recorded on the delivery note. The use of the computer would help thecompany in protecting the data and maintaining the accuracy. The quality control helps the company inensuring that the transactions occurred are accurately and completely processed as well as recorded.The application control used are the automated or manual procedures that tend to be applied to thetransaction’s processing by an individual application. Such quality control would help the company inensuring the accounting records’ integrity. Additionally, the company has been engaged in performingits valuable services in the highly competitive marketplace in accordance with the regulatory standards, contractual agreement as well as the ethical consideration. Since the company has been offering umber of services through technology enabled and physical efforts since its inception – patient recruitment, electronic data capture, laboratory analysis, clinical trials, and other related services. These services are complex and are highly subject to the ethical consideration, contractual agreement as well as regulatory standards for instance; the company adhere to the regulatory requirements such as current GCP and FDA as well as good laboratory practice requirement.
The strategy of the company for achieving the growth is based on its continuous efforts to innovate by leveraging advanced analytics, information, significant domain expertise as well as transformative technology. The company transforms the real world evidence through connecting the retrospective& prospective approaches as well as introducinginnovation which includes secondary control arms that would tends to omit the need for the placebo group. Additionally, through the combined offerings of the commercial services and the research and development service, the company has successfully built the platform that has allowed the company to become the more complete partner of its clients. Also, thecompany always seeks to acquire the businesses and asses that could strengthen its value proposition to the customers. Exploring of investing in the opportunities for the strategic acquisition provides a basis for growing its platform and enhancing the ability to provide more valuable services to the customers.
The company employs more than 67000 employees across the globe which includes 35000 research and development solution employees, 23000 technology and analytics solution employees and approximately 7000 contract sales and medical solution employees. The culture of the company is flexible which means that the employees working at IQVIA holdings are encouraged to work collaboratively and share their ideas and opinions. It also fosters the open communication and interaction among team. The employees are incentivized so that they could work passionately and actively to achieve the common and target goals andobjectives of the company. In addition, the entire workforce of the company is entitle ad accountable to the success of the company in the highly competitive marketplace.
Administrative procedures and internal controls to be carried out
The management of the IQVIA Holdings is accountable and responsible for establishing as well as maintaining the adequateinternalcontrols over the company’s financial reporting. The internal control over the financial reporting should be designed to provide the reasonable assurance related to the preparation of the financial reporting for external purpose of reliability of the financial reporting in accordance with the generally accepted accounting principles. The internal control of the company over the financial reporting includes those procedures and policies that pertains to the record maintenance that in reasonable details fairly as well as accurately reflect the disposition and transaction of the assets of the company and provide the reasonable assurance related to the timely detection and prevention of the disposition of the assets or unauthorized acquisition, of the company that can last the material impact on the financial statement of the company. Because of the inherent limitations, the internal control of the company over the financial reporting might not detect or prevent the misstatement. Additionally, the estimations of the effectiveness of the evaluation and assessment to future period are subject to the threats or risk that controls might become inadequate due to the significantvariations and changes in the conditions……………………………….
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