In Episode 2 of The Beehive Podcast, titled “The Backbone of Effective Internal Control: Understanding IPE and MRC,” host William sits down with expert auditors and risk advisory experts, Matthew Gopez and Precylou Burburan to dive into the intricate world of internal controls. The discussion spotlights two critical components: Information Produced by the Entity (IPE) and Management Review Controls (MRC). These systems are vital for mitigating risk, ensuring compliance, and driving better decision-making in today’s dynamic business environment.
Why Internal Controls Matter
IPE encompasses the data produced within an organization—whether through IT systems, applications, or manual processes. It is the foundation of transactions, financial reporting, and operational decisions. MRC, on the other hand, involves management’s evaluation and validation of this data to ensure accuracy and reliability.
As Precylou explains, “IPE is what management uses in the execution of controls, while MRC ensures that financial information is accurate and reasonable.” Together, they form the backbone of an effective internal control system, helping businesses safeguard their data and make informed decisions.
Discover how our Risk Advisory Team can strengthen your internal controls.
Why These Controls Are Critical
Properly managing IPE and MRC is crucial in a business world increasingly defined by audits and compliance requirements. Regulatory bodies like the Public Company Accounting Oversight Board often highlight deficiencies in these areas. Failing to validate IPE or implement effective MRC can lead to data inaccuracies, compliance violations, and financial mismanagement.
Matthew emphasizes, “The significance of IPE and MRC lies in their ability to build trust and drive operational efficiency while minimizing risks.” Whether you’re a startup or an established company, mastering these controls is essential for long-term resilience.
Read our blog on Mitigating Biotech Accounting and Financial Reporting Risks.
Real-World Applications of IPE and MRC
IPE can take many forms, from system-generated aging reports and trial balances to reconciliation documents in formats like PDF, CSV, or Excel. These serve as the groundwork for MRC, where management analyzes this data for accuracy.
For example, a balance sheet reconciliation control might involve validating IPE like a system screenshot of the trial balance or sub-ledger reports. This simple yet essential process demonstrates the interplay between IPE and MRC in maintaining operational integrity.Watch our Risk Advisory video on managing crucial controls for CPA firms.
Why Listen to Episode 2?
This episode offers actionable insights, including:- Understanding the scope of Information Produced by the Entity (IPE).
- The critical role of Management Review Controls (MRC) in organizational governance.
- IPE as a cornerstone for data-driven decision-making.
- MRC as a strategic tool for proactive risk management.
- Key challenges and threats impacting IPE quality.
- KStrategies to enhance IPE reliability and accuracy.
Ready to strengthen your internal controls and safeguard your business?
Tune in to Episode 2 of The Beehive Podcast—The Backbone of Effective Internal Control: Understanding IPE and MRC. Discover how mastering IPE and MRC can reduce risk, boost compliance, and drive better decisions.
