risk
Understatement of liabilities/expenses (completeness)
Unrecorded payables (cut-off failure), accrued expenses, unrecorded revenue for delivered goods, off-balance-sheet obligations, uncaptured inventory write-downs, and understated payroll/tax liabilities — understating obligations and overstating income.
Record JSON · Open in map · Data retrieval guide
Catalog revision: f368a6cce277037e4b1e1ff46004e3acd295f96c9ac63a411a0e45775a7f468e. A connection does not establish full coverage.
Attributes
- category
- financial_reporting
- domain
- Financial Reporting Controls (SOX)
- taxonomy
- sox-rmm-assertion
- inherent_rating
- high
Details
- risk_id
- fin-completeness-understatement
- category
- financial_reporting
- likelihood
- medium
- impact
- high
- inherent_rating
- high
- treatment
- mitigate
- taxonomies
- sox-rmm-assertion
Source
No record-specific source URL is provided.
Connections
- UC-FIN-10 — Safeguard assets and stored financial data mitigates Understatement of liabilities/expenses (completeness)
- strength
- related
- rationale
- Counts reconciled to records can surface unrecorded or missing assets.
- UC-BCDR-14 — Embed control activities in business processes mitigates Understatement of liabilities/expenses (completeness)
- strength
- related
- rationale
- Design-level practice ensuring embedded controls exist; the operative completeness controls are reconciliations and interface/three-way-match controls, not this umbrella UC.
- UC-FIN-06 — Validate completeness and accuracy of system inputs mitigates Understatement of liabilities/expenses (completeness)
- strength
- related
- rationale
- Input completeness checks ensure entered transactions are complete but cannot capture never-entered items like unrecorded payables; population completeness rests on reconciliations, interface totals, and three-way match.
- UC-FIN-09 — Ensure quality of information used in reporting mitigates Understatement of liabilities/expenses (completeness)
- strength
- related
- rationale
- IPE completeness validation confirms reports capture all underlying records.
- UC-FIN-03 — Perform and review account reconciliations mitigates Understatement of liabilities/expenses (completeness)
- strength
- primary
- rationale
- Subledger-to-GL reconciliation reveals unrecorded items and missing entries.
- UC-FIN-05 — Segregate incompatible financial duties mitigates Understatement of liabilities/expenses (completeness)
- strength
- primary
- rationale
- Separating recording from independent reconciliation ensures unrecorded liabilities/expenses are detected.
- UC-FIN-02 — Review financial results and the period-end close mitigates Understatement of liabilities/expenses (completeness)
- strength
- primary
- rationale
- Budget-to-actual and period-over-period variance review surfaces unrecorded liabilities/expenses.
- UC-FIN-07 — Control automated processing and resolve exceptions mitigates Understatement of liabilities/expenses (completeness)
- strength
- primary
- rationale
- Three-way match ensures liabilities are recorded for goods/services received.
- UC-ACCESS-20 — Ensure complete, accurate, and authorized data processing mitigates Understatement of liabilities/expenses (completeness)
- strength
- primary
- rationale
- Batch totals and completeness validation ensure all transactions are captured, preventing unrecorded items.
- UC-FIN-08 — Control interface transfers and output delivery mitigates Understatement of liabilities/expenses (completeness)
- strength
- primary
- rationale
- Record counts and control totals reconciled at each interface ensure no records are dropped.