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Accurate accruals Assurance

  • 1.  Accurate accruals Assurance

    Posted May 12, 2020 03:11
    What all controls revenue assurance can build around accruals assurance.  What are the top risks and how the same can be mitigated through secondary controls.

    Sahasrangshu Pal Choudhury

  • 2.  RE: Accurate accruals Assurance

    TM Forum Member
    Posted May 12, 2020 03:21
    My colleague @Gadi Solotorevsky may be able to assist here, as prime product manager in Amdocs' RevenueGuard offering for managing revenue assurance.​ See also here

    Hope it helps

    Jonathan Goldberg
    Amdocs Management Limited
    Any opinions and statements made by me on this forum are purely personal, and do not necessarily reflect the position of the TM Forum or my employer.

  • 3.  RE: Accurate accruals Assurance

    TM Forum Member
    Posted May 14, 2020 04:25
    You can find in the TM Forum documents, Revenue Assurance Solution GB941 Addendum E RA Coverage Model – Risk inventory and Measures Inventory. Relevant examples. We are now on the process of updating these documents, but I think that the actual version can give you a good starting point

    Gadi Solotorevsky
    Amdocs Management Limited

  • 4.  RE: Accurate accruals Assurance

    TM Forum Member
    Posted yesterday
    @ sahasrsngshu

    Below are a few risks in accrual accounting where you may consider creating RA secondary controls for accrual assurance

    1. Product or services that are sold on credit but the revenue is not received within a set period

     some example from telecom but not limited to:

      • prepaid mobile service loan product misused by the customer.
      • postpaid service rents and bundled subscription( like mobile handset) and payments in arrears or installments ( collection bad debts).
      • managed projects that involved multiple bundled products/equipment and the payments will be collected once the project is fully completed ( based on the contract signed) but the customer can start using some of the services before completion of the entire project.
    1. Income Tax paid before collecting the revenue and any mistakes in the accounting process or delay in collecting revenue may expose the company to revenue risk.
    2. If accrued receivables are treated as income/revenue and the accountant missed to enter it in the income statement.
    3. If the accountants missed to adjust the accrued receivables in the balance sheet as debits and also if he/she missed removing such debit entries once the amount is paid by the customer from the balance sheet.
    4. Considering the complexity of accrual-based accounting there is a possibility of creating mistakes in financial statements and such inaccuracies/ weak points/ loopholes in this accounting methods can impact financial reporting and the company's credibility.
    ​Hope this helps you.

    Sreehari Nampoothiry
    Dhivehi Raajjeyge Gulhun Plc