CandleFocus Glossary Editor
Open Kimono is a word that is used to refer to an organization that is transparent regarding any type of audits it may undergo. The phrase connotes an attitude of being open to all types of scrutiny, and this could range from the internal audit procedures and external audit procedures, to the Internal Revenue Service (IRS) audit. Open Kimono is therefore a phrase for full disclosure and best practices in terms of internal controls and procedures.
To open their books and records to all types of audits, companies must establish and maintain procedures and internal controls that are up to date and consistent with current regulations. This process helps ensure that all audits – both internal and external – will produce accurate and reliable results. Some of the internal and external controls that need to be in place include the proper segregation of duties and internal procedures for fraud prevention and detection.
In addition to proper internal controls, the process of Open Kimono should also include measures to restore public confidence in a company’s financial reporting integrity. To do this, a company must have strong leadership, and should make sure that their internal accounting processes are transparent, reliable and easily auditable. This could include public disclosures such as financial reports and management's discussion and analysis of the company's financial performance.
Open Kimono is an efficient risk management tool for companies looking to operate in an open and transparent manner. By properly disclosing all of a company's internal processes, procedures, and relevant information, companies can increase the trust and confidence that stakeholders, customers, and other interested parties have in the accuracy of their financial reports and disclosures. This type of trust is essential in today's market as it helps to ensure that a company's financial position can be accurately gauged. Additionally, Open Kimono helps to reduce the cost of external audits and enhance the company’s reputation among external stakeholders. In short, Open Kimono is a crucial component of the financial reporting process that helps to minimize the risk of fraud and increase public confidence in a company’s financial reporting.
To open their books and records to all types of audits, companies must establish and maintain procedures and internal controls that are up to date and consistent with current regulations. This process helps ensure that all audits – both internal and external – will produce accurate and reliable results. Some of the internal and external controls that need to be in place include the proper segregation of duties and internal procedures for fraud prevention and detection.
In addition to proper internal controls, the process of Open Kimono should also include measures to restore public confidence in a company’s financial reporting integrity. To do this, a company must have strong leadership, and should make sure that their internal accounting processes are transparent, reliable and easily auditable. This could include public disclosures such as financial reports and management's discussion and analysis of the company's financial performance.
Open Kimono is an efficient risk management tool for companies looking to operate in an open and transparent manner. By properly disclosing all of a company's internal processes, procedures, and relevant information, companies can increase the trust and confidence that stakeholders, customers, and other interested parties have in the accuracy of their financial reports and disclosures. This type of trust is essential in today's market as it helps to ensure that a company's financial position can be accurately gauged. Additionally, Open Kimono helps to reduce the cost of external audits and enhance the company’s reputation among external stakeholders. In short, Open Kimono is a crucial component of the financial reporting process that helps to minimize the risk of fraud and increase public confidence in a company’s financial reporting.