Accountant at Work

Divestiture IT Risk Assessment

CLIENT SUCCESS STORIES

Client Profile:

An American multinational automotive manufacturing employing over 200,000 people and conducts business in more than 140 countries.

Client Challenge:

One of the largest automotive manufacturers in the world was negotiating the sale of their steering gear business. The complexities of negotiating the sale were causing delays. This created concerns with management that they would have to demonstrate compliance around IT controls if the sale was not completed before their fiscal year-end. Management in the compliance group requested Herndonwood to perform a review highlighting risks around the IT control environment.

Management brought in Herndonwood to manage the resolution of the gaps because they understood the need to supplement existing staff, obtain missing skills, act quickly, and create structure around the process.

 

Approach & Solution:

Herndonwood met with management from both the automotive manufacturer and the steering gear leadership team to determine scope and breadth of the engagement. Herndonwood understood the overwhelming requests to the steering gear manufacturer from the various due-diligence initiatives being conducted as part of the pending sale and the need to complete the review while respecting their other commitments. Herndonwood performed the following activities:

  • Herndonwood met with management from both the automotive manufacturer and the steering gear leadership team to determine scope and breadth of the engagement. Herndonwood understood the overwhelming requests to the steering gear manufacturer from the various due-diligence initiatives being conducted as part of the pending sale and the need to complete the review while respecting their other commitments. Herndonwood performed the following activities:

  • Leveraged the prior year’s audit work papers to target potential risk

  • Developed a limited scope focused on:

    • Prior findings

    • Areas of significant change

    • Trouble areas for IT organizations

  • Performed a review leveraging limited samples

  • Created a management report depicting areas of potential risk and recommendations

Business Impact:

Herndonwood was able to develop a report to provide necessary visibility to make informed decisions to management of each of the two organizations. This was achieved while limiting the impact on the already request burdened steering gear management team.