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Automation and digitalisation can reduce the costs of corporate governance, optimise business processes and meet new requirements for risk management. The transformation takes place both at the level of the governance systems themselves and at the level of the business processes. Decision-makers have various methods and technologies at their disposal, which should be coordinated in such a way that they optimally meet the individual situation of the respective company. In this way, risk and compliance management as well as internal control systems can make a substantial contribution to the future viability of the company and actively accompany the upcoming change processes.

What does this mean for a modern and efficient ICS?

Effective processes and controls are the decisive operational management instrument for keeping damage away from the company or reducing it to a tolerable minimum. New, modern ICS approaches offer the possibility of not only making control activities more secure, but also generating significant added value in the control action itself as well as in the process.

Gone are the days when documents were passed on in paper form or individual receipts were painstakingly reconciled - today, internal control systems (ICS) are in part no longer even visible, but are for the most part already digitalised. Against this backdrop, progressive digitalisation and automation can represent a promising opportunity to replace or optimise manual activities and controls. By making better use of existing IT systems, real-time evaluations, the use of robotics for repetitive process and control steps and other tools, our customers can actively accompany the changes today and ensure the future viability of their company.

Furthermore, if used consistently - and cooperatively - these new approaches offer the opportunity to establish a new understanding of interdisciplinary cooperation internally. After all, only uniform structures whose elements mesh perfectly can create an efficient control system. So it is not only digital solutions at the control level that shape a modern ICS, but a holistic, strategic view that shapes the ICS of the future.

Our aim is to help you understand the latest developments and topics relating to internal control systems. KPMG supports you on your way to a digital and sustainable ICS function with the following services:

1. Optimisation of the internal control system - digital ICS 

  • ICS efficiency analysis - analysis of your controls as well as data analyses on your processes as a basis for identifying ICS optimisation potential against the background of the digital transformation. 
  • Implementation of optimisation measures - from harmonisation and standardisation of processes and controls to complex automation solutions.

2. Robotic Process Automation and the impact on the ICS

  • Some of the control activities or activities in the (annual) ICS cycle are repetitive and manual, and are therefore particularly well suited for transfer to an RPA model (e.g. general ledger/sub-ledger reconciliation, price reconciliations, purchase price variance OR testing activities such as automated data downloads, automated audit actions, reporting, etc.).
  • The use of RPA then requires a new control perspective, as such digitised activities require an appropriate governance or monitoring model.

3. ICS in the context of AI applications

  • Design and implementation of process and control structures in the IT and operational areas based on the KPMG AI in Control framework.
  • Design and implementation of an AI-oriented governance organisation with elements such as an AI code of conduct, an AI guideline and a risk assessment
  • Identification of potential for automation using artificial intelligence in your processes and manual activities
  • Audit of the governance organisation/ICS via the AI systems, the AI-specific operating model, as well as individual algorithms with reference to accounting (relevance in the context of the audit of the financial statements). 

In addition to digital solutions, trends are also emerging in terms of content that redefine the ICS beyond the dimension of "financial reporting". Increasing regulation in various corporate areas as well as new risk areas, such as cyber security or crisis management, require a new examination of the traditional scope of the ICS. It is becoming apparent that the orientation of the ICS is now very diverse and a concrete dovetailing with risk and compliance management and also internal auditing is unavoidable. Some examples of new risks and possible starting points for the ICS are listed below: 

  • Tax ICS
  • Sustainability ICS
  • ICS & Business Continuity Management

Our ICS experts will be happy to answer any questions you may have on current developments and topics related to ICS Strategy & Transformation. We support you in keeping pace with the digitalisation of internal control systems and in ensuring continuous security in your business processes through the extended audit of internal controls in your company.

Further Information (in German only)