INTERNATIONAL FINANCIAL REPORTING STRUCTURE

Project Scope:

Our client, an offshore drilling contractor, has experienced significant growth. The company’s international tax restructuring environment became increasingly active in 2010 and 2011. Many new legal entities were formed; assets and equity were transferred between them, and the corporate structure become increasingly complex. As a result, statutory audit requirements intensified and several new international jurisdictions required independent audits and/or local filings of financial statements. Additionally, company management wished to improve controls over the transfer of cash between entities and subsequent accounting and reporting procedures.

Horn Solutions was engaged to work with the Legal, Tax, Accounting, and Treasury departments to develop and organize general ledgers and related accounting records to be consistent with the legal structure of the various organizations and to accurately record accounting transactions.

Project Approach:

Horn Solutions worked closely with company management and its external auditors to develop processes, documentation, and controls for the company’s international financial reporting requirements and regulatory standards. We accomplished this by:

  1. Reviewing documentation prepared by Big 4 accounting firms which outlined the proper methodologies for recording transactions.

  2. Reconciling intercompany accounts to establish accurate and up to date balances.

  3. Reviewing audited financial statements at the general ledger account level to ensure journal entries were booked as intended and the tax, legal, and accounting documentation was consistent.

  4. Preparing a Statutory Financial Statement Calendar, outlining critical due dates and requirements by legal entity.

  5. Coordinating and working closely with external auditors to wrap up open items from statutory audits.

Project Benefits/Savings

As a result of Horn Solutions efforts, our client achieved significant improvements in its tax and accounting functions and realized significant cost savings. These benefits and savings include:

  1. Accurate statutory financial statements for all of its entities.

  2. Reduced risk of unnecessary and/or ill-timed repatriation of international funds, which could result in the creation of a costly taxable event.

  3. Reduced audit fees resulting from fully reconciled account balances supported by appropriate legal documentation.

  4. More accurate tax returns, prepared in reduced time frames, as a result of the availability of accurate and timely statutory financial statements.

  5. Improved treasury settlement processes resulting from the improved intercompany account reconciliation process.

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