Top 5 Auditing Challenges in SAP S/4HANA and How to Overcome Them
As businesses around the globe implement SAP S/4HANA, which provides strong ERP capabilities, the necessity of robust auditing calls for the same in depth. Auditing brings about clarity, compliance, and proper governance in the system; this is however no easy feat. SAP S/4HANA has many solutions and tools provided to the auditing function, though navigating its components allows one to examine all facets are secure and compliant.
The five major auditing challenges of SAP S/4HANA are discussed below, offering practical solutions to overcome them. This will ensure that the audit process is smooth and effective.
Managing Complex Data Structures
One of the greatest difficulties while auditing SAP S/4HANA is dealing with complex data structure. Designed on SAP HANA in-memory database, SAP S/4HANA can process real-time data. While this has happened to be one feature that wonders and gives excellent performance, handling big amounts of data, real-time analytics, and multiple data sources create complications during an audit process.
How to Overcome It
The silver lining is that if the system’s data architecture is known well. SAP S/4HANA possesses some key audit trails and transaction logs enhancing data tracking. Using SAP Audit Management involves leveraging real-time visibility in business processes, and this is completely integrated with SAP S/4HANA. It also makes analysis of data simpler and traces transactions with some anomaly. Auditors thus must take their time to know how the HANA database operates, hence gaining a clear understanding of where the data exists and exactly how it is processed.
Ensuring Regulatory Compliance
Changing regulations and ensuring that every part of your SAP S/4HANA system meets those changes can be overwhelming. Depending on the industry, businesses must adhere to various global and regional compliance standards, such as GDPR, SOX, or ISO standards. It’s not easy to ensure that every part of SAP S/4HANA complies, especially when a compliance protocol isn’t regularly updated within the system.
How to Overcome It:
SAP GRC solutions can be implemented for local and global compliance in SAP S/4HANA, which enables your business to automate all risk management processes and monitor compliance requirements. Concurrently, also required is a review of your compliance status where any updates about the regulations are reflected in your system. Apart from the above, contact with SAP’s Customer Influence Programs keeps auditors abreast of the changes happening at the SAP level with respect to compliance updates.
Audit Trail Visibility
One key problem with audits in SAP S/4HANA is a lack of clear transaction history visibility. It will not be easy to determine who changed what, when, and in what way if the audit trail is unclear. Such hidden problems could seriously jeopardize the financial audits or compliance reporting.
How to Overcome It:
This can be overcome using SAP Read Access Logging feature, which is designed to track and log users’ access to sensitive data. This will ensure that every aspect of data access, every transaction, is logged for the audit trail. Further, Configuration of Change Documents and Audit Logs can monitor specific changes to master data or other configuration settings. Monitoring RAL and audit logs will be regularly checked and configured to maintain transparency within your system. The two tools help auditors gain visibility over what’s going on within the system-who is doing what, and what potential issues may have reached a breach.
Segregation of Duties (SoD)
Segregation of Duties (SoD) is a key component of the overall internal control structure of any organization. In SAP S/4HANA, SoD ensures no single person has access to all aspects of an important business process and the ability to commit fraud or create an error, for example. The difficult part about setting up SoD controls is setting them up, especially if there exist multifarious departments with different types of accesses.
How to Overcome It:
To overcome the challenges identified, SAP is now publishing the SoD module as part of the GRC suite. This tool lets you define SoD rules across your organization and then monitor and enforce those rules. To do this, you can also leverage the same tool as auditors to detect potential SoD conflicts and then ensure remediation action such as elimination or access or imposition of compensating controls. This also relates to monitoring the user roles and authorizations available in SAP S/4HANA regularly so that the correct access level for any user is set up according to the corresponding job responsibility. Recurring audits of user roles prevent violations of SoD from arising in the first place.
Managing Continuous System Updates and Changes
Another dynamic platform is SAP S/4HANA, in continuous update, patches, and enhancements, which while increasing functionality and security, pose challenges for auditors. Where there are new features or changes made to existing configurations, there is unintended risk unless checked diligently and monitored adequately, such that it may likely slip through the audit net.
How to Overcome It:
To meet this challenge, you should install a Change Management process in your SAP S/4HANA system. This process must have a thick approval workflow where all the changes to configurations, processes, or roles must be validated and approved before its implementation in the system. Changes can be tracked and analyzed using tools available in the SAP Solution Manager so that any change in the system is documented and auditable. It should perform periodic audits for patches to ascertain whether any new security vulnerabilities or compliance issues have been introduced due to the software system updates. To that end, the auditors must ensure they keep constant communication with the IT team to know of any changes to the system that are about to be implemented impacting the audit.
Final Thoughts
Auditing SAP S/4HANA is a challenge in itself, it is the process of managing challenges with the help of right tools, and thus the challenges in it can be managed well. To ensure audits are comprehensive and compliant, an auditor could rely on the SAP-provided solutions built into the product, such as SAP Audit Management, GRC Access Control, and Read Access Logging.
The winning principle behind it is the complexity of the SAP S/4HANA system, auditing processes updated regularly, and automation as much as possible. This way, businesses can deal with their audits confidently and quietly, taking care of all operations in a compliant and secure manner.
Addressing these top five challenges will make your organization able to improve internal controls within the company, better ward off potential risks, and become open with all the facets of the audit process.
