Dynamics 365 Governance, Risk, and Compliance (GRC)

12 Members

Join now

Sign in with your Dynamics 365 Community account

If you don’t have a Community account, you can create one.

Share group

Location

United States

Details

Welcome to the National Dynamics 365 Governance, Risk, Compliance (GRC), and Security user group! This group is a specialized community of Microsoft Dynamics 365 users, enthusiasts, and experts passionate about topics of Governance, Risk, Compliance, Security, and SOX (Sarbanes-Oxley) compliances within the Dynamics 365 ecosystem.

Our aim is to ensure the community collaborates and innovates to deliver a secure, compliant, and SOX-adherent ERP solution.

Group leaders

Dogan Adiyaman

Discussion

Join the group to participate in the discussion.

Dogan Adiyaman 674 User Group Leader on

Like (0)

SEGREGATION OF DUTIES (SOD) RISK ANALYSIS IN DYNAMICS 365 FINANCE AND OPERATIONS (D365FO)

In today’s business landscape, ensuring compliance and safeguarding financial systems against fraud and errors are critical for organizations. One of the key practices to achieve this is implementing Segregation of Duties (SOD)—a control measure that prevents a single individual from managing multiple critical tasks within a business process. Dynamics 365 Finance and Operations (D365FO) provides a tool to help organizations analyze and manage SOD risks effectively. By leveraging its built-in security framework, role-based access controls, and analytical capabilities, businesses can identify potential conflicts and enforce appropriate control measures to maintain compliance.

Solution Components for SOD in Dynamics 365 Finance and Operations (D365FO)

In Dynamics 365 Finance and Operations (D365FO), Segregation of Duties (SOD) revolves around managing duties—a fundamental concept within the security framework. Duties represent a collection of related privileges that define what a user can do within the system, ensuring their access aligns with their responsibilities. Here are the key solution components that support SOD in D365FO:

Security Roles, duties and privileges

Roles are assigned to users, directly linking them to duties and privileges.
SOD is managed by ensuring that roles do not encompass conflicting duties.

Segregation of Duties Rules

D365FO includes a framework for defining and enforcing SOD rules. These rules specify which combinations of duties are considered incompatible and must not be assigned to the same user. Conflict Example: A user assigned to both "Maintain Vendor Invoices" and "Approve Vendor Invoices" duties creates a risk of unauthorized transactions. The list of these conflicts forms Segregation of Duties (SOD) Framework. It's also known as SOD ruleset.

SOD Violations Detection and Analysis

Administrators can run diagnostics to identify violations to support compliance with regulatory standards such as SOX. D365FO provides configuration options to address identified conflicts, such as reassigning duties or splitting responsibilities across multiple users.

Mitigation / Remediation Tools: Workflows and ITACs

SOD enforcement is closely tied to workflows in D365FO. Approvals and reviews are built into workflows, ensuring that no single individual has control over critical processes.

By leveraging these components, D365FO allows organizations to establish a secure environment that supports operational efficiency while maintaining compliance with internal and external regulations. The next section will delve into the process of configuring these components for effective SOD risk analysis. ITACs are not separate concepts but complementary mechanisms that enforce Segregation of Duties (SOD) and other security principles in Dynamics 365 Finance and Operations (D365FO). While workflows focus on approvals, ITACs enforce transactional integrity.

Show previous comments

Dogan Adiyaman 674 User Group Leader on

Like (0)

Revenue Recognition and SOX Reporting in Dynamics 365 Finance and Operations

UNDERSTANDING REVENUE RECOGNITION IN FINANCIAL REPORTING

Revenue recognition is a fundamental aspect of financial reporting, directly influencing a company's ability to present accurate financial statements. When combined with the regulatory requirements of SOX (Sarbanes-Oxley Act) compliance, the process of recognizing revenue becomes even more critical. For organizations using Dynamics 365 Finance and Operations (D365FO), there are several built-in functionalities designed to streamline revenue recognition and enhance compliance efforts. In this post, we’ll explore the importance of revenue recognition and how D365FO can help support SOX reporting requirements.

Revenue recognition involves recording revenue when it is earned, not necessarily when payment is received. Standards like IFRS 15 and ASC 606 set the guidelines for this process, requiring companies to follow a structured approach to ensure accuracy and consistency. The key steps include:

Identifying the contract and performance obligations
Determining the transaction price
Allocating the transaction price to performance obligations
Recognizing revenue upon satisfaction of obligations

In D365FO, the Subscription Billing module provides specialized tools that align with these standards. These features are designed to automate and manage complex revenue recognition processes, ensuring compliance and reducing the risk of manual errors.

IMPLICATIONS OF INCORRECT REVENUE RECOGNITION ON SOX REPORTING

The consequences of incorrect or premature revenue recognition can be severe, impacting both financial results and regulatory compliance. Common pitfalls include:

Overstating Revenue: This can occur if revenue is recognized before it is actually earned. Overstated revenue inflates financial performance, misleading investors and potentially resulting in restatements.
Understating Revenue: Conversely, delaying revenue recognition can understate performance, potentially affecting investor confidence and decision-making.
Inadequate Disclosures: SOX requires transparent financial reporting, including proper disclosures about revenue recognition policies. Inadequate disclosures can lead to compliance issues and potential fines.

To avoid these pitfalls, companies must integrate their revenue recognition processes with SOX controls, ensuring that every revenue entry is scrutinized, well-documented, and aligned with both accounting standards and internal policies.

In summary, effective revenue recognition is critical for accurate financial reporting and SOX compliance, especially for companies using Dynamics 365 Finance and Operations. By leveraging the capabilities of the Subscription Billing module, organizations can automate and streamline their revenue recognition processes, reducing the risk of errors and ensuring adherence to IFRS 15 and ASC 606 standards. With robust integration of SOX controls, businesses can confidently present their financial performance while maintaining compliance, thereby enhancing transparency and investor trust.

Show previous comments

Dogan Adiyaman 674 User Group Leader on

Like (0)

Segregating Responsibilities in Vendor Invoice Processing

Segregation of Duties (SOD) is a foundational principle in internal control that ensures critical tasks within business processes are divided among multiple individuals. This division of responsibilities helps prevent fraud, errors, and conflicts of interest by reducing the likelihood of any one person being in control of all parts of a transaction. It is particularly relevant for financial operations, where sensitive transactions such as vendor invoice processing must be handled with care to maintain compliance with regulations such as SOX (Sarbanes-Oxley Act) and safeguard the organization from financial mismanagement.

Microsoft Dynamics 365 Finance (D365 Finance) integrates SOD principles throughout its workflows, ensuring that organizations can enforce these controls systematically. Vendor invoice registration and processing, in particular, benefit from D365 Finance’s robust SOD capabilities, allowing businesses to create clear separation between invoice registration, matching, and final posting activities.

It is essential to understand why SOD is critical for businesses. By enforcing SOD:

Risk of Fraud is Minimized: When key duties like approval, execution, and verification are split across multiple individuals, it becomes much harder for anyone to manipulate the system without detection.
Error Detection is Enhanced: SOD reduces the likelihood of undetected mistakes, as different eyes are involved in various steps of the process, providing opportunities for checks and balances.
Compliance Requirements are Met: Regulatory frameworks such as SOX mandate SOD as part of their requirements for financial reporting integrity, and failure to implement these can result in penalties or reputational damage.

In vendor invoice processing, SOD plays a key role by ensuring that the registration, approval, and posting of invoices are handled by separate personnel, or at least separate workflow processes, reducing the chance of unauthorized or erroneous payments.

Microsoft designed Dynamics 365 Finance screens and workflows with built-in SOD principles to streamline the segregation of duties in processes like Registering, Matching, and Posting.

This clear segregation of duties ensures that no one individual has control over the entire vendor invoice process. By splitting the process into distinct responsibilities—registration, matching, and posting—the organization minimizes the risk of fraud or error. Each person involved has a specific role and responsibility, contributing to the integrity of the financial data and reducing the likelihood of internal control failures.

Show previous comments

Dogan Adiyaman 674 User Group Leader on

Like (0)

Hi Everyone,

I wanted to let you know that we're adding a new knowledgebase entry soon: "Implementing Security with Azure Active Directory User Groups in Dynamics 365 Finance & Operations."

Stay tuned for more details!

Show previous comments

Dogan Adiyaman 674 User Group Leader on

Like (0)

EFFECTIVE USER ONBOARDING IN DYNAMICS 365 FINANCE AND OPERATIONS FOR SOX COMPLIANCE

User onboarding is critical in SOX compliance because it establishes the foundation for secure and compliant access to financial systems, specifically Dynamics 365 Finance and Operations (D365FO). Here are the key reasons why user onboarding processes are essential:

1. Controlled Access to Financial Data

Approval and Authorization: User onboarding ensures that new users are properly reviewed and approved before they are granted access to the system. This prevents unauthorized individuals from accessing sensitive financial information. Dynamics 365 Finance and Operations (D365FO) is particularly well-suited for this task due to its robust workflow functionality. The workflow feature in D365FO automates the approval process, ensuring that each step is documented, consistent, and compliant with SOX requirements. This built-in functionality helps streamline the approval process, making it efficient and reliable.
Access Based on Role: Onboarding involves assigning roles and permissions that align with the user's job responsibilities. In D365FO, role-based access control is used to ensure users only have access to the data and functions necessary for their role, minimizing the risk of data breaches. D365FO allows for detailed role definitions and easy management of user permissions.

2. Ensuring Compliance with SOX Requirements

Documentation of Approvals: SOX compliance requires that all access to financial systems be properly documented and approved. Dynamics 365 Finance and Operations provides a Workflow History screen that is ideal for this purpose. This screen maintains a detailed log of all workflow activities, showing who approved access, when it was approved, and the actions taken. This comprehensive documentation is crucial during audits to demonstrate compliance and ensure that all access approvals are properly recorded.
Policy Adherence: Onboarding processes ensure that new users are informed about and comply with company policies and regulatory requirements, including those related to SOX. D365FO can be configured to include policy acknowledgment as part of the onboarding workflow, ensuring that users confirm their understanding of compliance requirements before gaining access.

3. Risk Mitigation

Minimizing Security Risks: By having a structured onboarding process, companies can ensure that new users are educated about security protocols and compliance requirements, reducing the risk of accidental or intentional misuse of financial data. D365FO supports security training and awareness programs by integrating training modules and tracking completion as part of the onboarding workflow.
Verification of User Identity: Onboarding typically includes verifying the identity of new users, which helps in preventing fraud and ensuring that only legitimate users gain access to the system. D365FO can integrate with identity management solutions to verify user identities during the onboarding process.

4. Audit and Accountability

Trackable Processes: A formal onboarding process creates a clear audit trail showing who was given access, who approved it, and what level of access was granted. The Workflow History screen in Dynamics 365 Finance and Operations is particularly valuable for this purpose. It provides a detailed, transparent, and traceable record of all workflow activities, including approvals, changes, and actions taken. This ensures that during SOX audits, you can demonstrate that proper controls are in place and that all access permissions have been appropriately managed and documented.
Regular Review: As part of the onboarding process, it is essential to periodically review and update user access to ensure it remains appropriate, further supporting SOX compliance. D365FO can automate reminders and workflows for periodic access reviews, ensuring continuous compliance with access policies.

Show previous comments

Group leaders

Dogan Adiyaman

Leader

Members

Member

Member

Member

Member

Member

Member

Member

Member

Member

Member

Member

There are no events in this group yet.

We add events regularly, so check back at a later time.