Compliance & Technology : CFO Perspective

COMPLIANCE AND TECHNOLOGY

Private & Confidential

COMPLIANCE - MEANING

Private & Confidential 2 FSL SOFTWARE TECHNOLOGIES LTD

COMPLIANCE is nothing but the certification / confirmation of the task which was defined in the prescribed legislation, laws, rules & regulation, specified standards, or the terms of a contract.

It can be following types:

• STATUTORY / LEGAL COMPLIANCE which are defined under various statutory laws by the various statutory bodies like Companies Act by ROC, FEMA by RBI etc.

•ADMINISTRATIVE COMPLIANCE which are to be compiled w.r.t to certain contracts entered like with banks, insurance, various agreements etc.

•INTERNAL COMPLIANCE which are defined by the department of different companies like submission of various MIS, fundflow, region sales report etc.

http://www.businessdictionary.com/definition/term.html

http://www.businessdictionary.com/definition/contract.html

WHAT IS TECHNOLOGY

3Private & Confidential FSL SOFTWARE TECHNOLOGIES LTD

TECHNOLOGY

Equipments & Tools like computers, Webcam etc

Communication Mechanism like Internet, Data on Cloud etc

Equipments & Applications like Antivirus, security certification etc

Software Applications

For Business Control like ERP

For Operations Control like CRM , Compliance, PSA (Professional Service Automation)

POWER OF TECHNOLOGY

4 FSL SOFTWARE TECHNOLOGIES LTD

Expansion Beyond a point without Technology is “IMMPOSSIBLE”


ROLE OF TECHNOLOGY IN COMPLIANCE


A. TECHNOLOGY HELPS IN LEARNING • Search Engine / Knowledge Base•Web based Tutorials•Cd’s rather than Books•Various softwares which provides upgraded forms etc for filing

B. TECHNOLOGY HELPS IN EXECUTION

•Facilities for filing returns• Auto Check & Duplication check•Ease of operations•Various facilities like offline returns of service tax, income tax etc

ROLE OF TECHNOLOGY IN COMPLIANCE


C . TECHNOLOGY HELPS IN CONTROL & REVIEW • Reports available on one click• Exceptions reports are there to alarm well in advance•Reports of person wise, location wise, priority wise etc are available to review a particular person or company/location or high risk compliances

IMPORTANCE OF CONTROL & REVIEW

Compliance are done by the executors who are at the junior level of the organization at different locations / departments BUT the Accountability are vested on the Directors or the Key management person who are at the Top level of the organisation

CURRENT SCENERIO


HOW MOST OF THE ORGANISATION ARE MAINTAINING THE COMPLIANCES

A. (i) SINGLE LOCATION MULTIPLE EXECUTORS

(ii) MULITI LOCATION MULTIPLE EXECUTORS

B. HO - CFO/ CS/ DIRECTORS

-Dedicated one senior person for Compliances-Seek mails/ certificates from the executors every month compiled status report from all location & all executors to strong follow-up for missing information-No access to physical records-And generally one & two people & some fully booked for this excersice

C. USERS- Have their own list of Compliances on Excel-Information to superior about Compliances through phone/ mails

INSPITE OF ALL THE ABOVE THE SYSTEM ARE NOT FULL PROOF

As per the Sec 134 (5) ( f) of New Companies Act 2013 the director has been vested with the responsibility of

“devising proper systems to ensure COMPLIANCE with the provisions of all applicable laws and that such systems were adequate and operating effectively”

Consequences: Fine Rs. 50k to Rs. 25 lac AND OFFICER INCHARGE shall be punishable with IMPRISONMENT for a term maximum to Three years.

NEED TO AUTOMATE THE COMPLIANCE SYSTEM


CHALLENGES OF CONTROL & REVIEWS OF COMPLIANCES


High number of compliances spread across multi-locations and multi-people having there own inconsistent practices.

One system which integrates all Compliances of all different locations under single platform



System of getting the Compliance reports & time spend in report writing by the employees

An Automated system where no couriers, mails were required to be sent and you could see Compliance reports sitting on your place



Compliances data being maintained by various peoples in various departments

Centralized system having standard process/format across the organization



80% of the time of the compliance team is going in maintaining & searching the huge compliance data

20% of the time is going on doing the actual compliance

With the effective compliance tool the figures can be reversed i.e. 20% in maintaining & searching and 80% on actual compliances



Too much time spent on compiling and generating MIS reports of all the regions and presenting to the management

A System where all this available at the click of a mouse duly compiled and an MIS as of now



Surety of the report compiling done by responsible user

System generated MIS Report with no manual intervention and should be available on demand any where, any time and any place.



Old Compliance reports / any compliance and will take time to reach you after they are compiled



A System where all this available at the click of a mouse duly compiled and an up to date MIS

Skipping of a compliance required to be submitted for a specific period / month OR delay in adhering to the compliance on a particular due date.

Centralized Library and the system will remind you the due date and target date of the compliances



If Employee quits his job

With the system anyone can keep a track of each and every compliance and could conveniently switch responsibilities to someone else to take them forward




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Compliance & Technology : CFO Perspective